I told you Gold was also a Bubble.

Discussion in 'Economics' started by jueco2005, Feb 29, 2012.

  1. http://www.bloomberg.com/news/2012-...anke-gives-no-signal-of-any-new-stimulus.html


    Gold Falls as Fed Offers No New Stimulus
    By Debarati Roy - Feb 29, 2012 12:16 PM ET .LinkedIn Google +1 Print QUEUEQ..Gold plunged, heading for the biggest decline this year, on expectations that the Federal Reserve will refrain from taking new action to bolster the economy. Silver slumped the most since December.

    The dollar rebounded after Fed Chairman Ben S. Bernanke, in congressional testimony, gave no signal that the central bank is considering additional measures to spur the economy. He said the inflation outlook is “subdued.” The greenback gained as much as 0.5 percent against a basket of competing currencies. Before today, gold prices climbed 14 percent this year, compared with a 10 percent gain in 2011.

    QFeb. 29 (Bloomberg) -- Federal Reserve Chairman Ben S. Bernanke delivers his semi-annual report on monetary policy to the House Financial Services Committee in Washington. (This report contains opening statements. Source: Bloomberg)

    QFeb. 29 (Bloomberg) -- Federal Reserve Chairman Ben S. Bernanke testifies before the House Financial Services Committee in Washington about the central bank's monetary policy. (This is an excerpt from the hearing. Source: Bloomberg)
    .“People were expecting that the Fed would loosen policies, even if the perception is that the economy is doing well,” James Dailey, who manages $215 million at TEAM Financial Management LLC in Harrisburg, Pennsylvania, said by telephone. “The investor sentiment changed as the Fed committed to nothing. This is the manic nature of the market.”

  2. Time to panic.
  3. Bernanke cannot hinder Gold without simultaneously destroying the stock market. When stocks decline enough, QE3 will be back and Gold will again rise.
  4. MKTrader


    Ah, a big one day drop means a long-term call was spot-on.

    Looks like some buying/adding opportunities are coming up.
  5. S2007S


    The only thing that can support this stock market is more QE3 hahaha

    Without it the markets are headed straight down, you can thank BUBBLE ben bernanke for the 100% rally off the lows by injecting trillions into the system....if it wasnt for that the SPX would still be sitting under 1000!!!!
  6. Of course. I also thought it was interesting that the spiggots went "wide open" the day BAC broached the psychological $5 barrier. But I'm just a "wingnut".

    It's comical that we've lived thru this stupidity umpteen times in the past decade and all the usual indicators line right up when central banks are overly accomodative. Consumer confidence improves and the news chases the market higher.

    The pundits were universally in agreement that we were already in a recession late last fall as the markets dropped and Europe couldn't come to an agreement on the funding of all its acronyms (LTRO, ECB, IMF, etc). Replace a few of the guys who wouldn't "play ball" and voila everything starts ramping higher.

    Once again, everything is fine and dandy until oil prices threaten to expose this charade for what it really is. Gold and silver also played a part as they didn't really get "jiggy" until the past few weeks when the consensus was that the CB's would do everything in their power to stave off any unhappy endings.

    All it takes is a brief respite from the rhetoric and risk assets can drop like rocks. The markets are completely dependent upon continued easing...ZIRP thru 2014 will probably need to be extended to 2017 or some other sort of insanity for the next round of "animal spirits".
  7. rew


    Congress is absolutely guaranteed to continue the policies that have put a floor under the price of gold -- deficits in excess of $1 trillion a year. Social Security is already in deficit (the "payroll tax cut" just adds to the red ink). Medicare is in worse shape. The baby boomers are starting to retire in significant numbers so the burden on the big entitlement programs is only going to get much worse. Public employee pension funds are wildly underfunded and the tax paying public can't afford the huge tax increases that would be required to bail them out -- the expedient thing will be for congress to bail out the states with more funny money from the Fed.

    Regardless of which mainstream Democrat or Republican gets elected America will still waste hundreds of billions of dollars a year playing world cop. (Ron Paul has the same odds of winning that I have of winning the lottery.)

    Only the willingness of other governments to buy our debt no matter how ludicrously low the yields keeps the boat afloat, and has stopped us from being another, much bigger, Greece.

    So, no, I'm not particularly concerned about the latest hiccup in the price of gold. If it drops enough so that the usual talking heads are crowing about the collapse of the gold bubble (not just one ET poster) then I'll buy some more.
  8. zdreg


    "the expedient thing will be for congress to bail out the states with more funny money from the Fed."

    Of course follow the Argentinian way to bankruptcy. the central gov't bailed out their provinces and the country went broke and inflation went through the roof.1st they paid gov't workers in script then the central gov't came to rescue the provinces, think california and illinois.
    there was a time when some power hungry mods would delete posts comparing the US to Argentina. no more.