GOLD

[Aussie]

Thats interesting, that is the first time ive heard that. It seems to me that gold prices could be effected by real interest rates but i'm not sure how real interest rates would be effected by the price of gold... i'll forward this on to martin armstrong he's not exactly a fan of goldman and he might have some input on this

Thanks Craig, that would be awesome. He should look into "Gibson's Paradox" I'm in the middle of reading his latest report "Is It Time To Turn The Lights Out". It's a great read so far . . .

http://www.contrahour.com/turnoutlights209.pdf

[JBmurc]

WOW talk about sharp rise GOLD up to $60 at it's peak from it's 2hr ago low someones buying up big

[Aussie]

WOW talk about sharp rise GOLD up to $60 at it's peak from it's 2hr ago low someones buying up big

Fed just announced they are buy US$Trillion in Treasuries. Quantitative Easing has officially begun in the US. The printing presses just got switched to high.

[Dr_Who]

Wow amazing!

[Lego_Man]

POG in NZD terms is still down...

[Aussie]

Trader Dan over at JSMineset is a must read each day . . . great analysis.

http://jsmineset.com/index.php/2009/...trader-dan-86/

[arco]

POG in NZD terms is still down...

Currently about 15% down since 3rd March if my calcs are correct

[Aussie]

End Game - Printing The Reserve Currency

For months now, both Fed Chief Bernanke and Treasurers Paulson and Geithner have been spouting the same mantra. The Fed and/or the Treasury, they keep repeating, will do "whatever is necessary" to rescue the global financial system from its present implosion. This week, the Fed went as far out on the monetary limb as a central bank can go. It announced plans to MONETISE $US 300 Billion of the debt of the US government as issued by the US Treasury. This is the ultimate form of money printing, made possible only because what the US (and the world) uses as "money" is fiat paper backed by nothing and redeeemable in nothing except more of the same.

Yes, other central banks have announced plans to monetise the debt paper of their governments. The Japanese central bank has been doing it for quite a while now. And in the week before the Fed announcement, the Bank of England announced their own plans to start buying (with "money" created out of thin air) UK government bonds.

It is one thing for the central bank of Japan, the UK or anywhere else to embark on what is now quaintly referred to as "quantitative easing". It is another thing entirely for the central bank of the nation which provides the world with its RESERVE CURRENCY to do so. In the past, nations which provided the world with "key currencies" have seen themselves as being forced up into a corner from which there is no escape except to either repudiate their debt or literally print it out of existence. These nations, including the UK in the early 1930s, did monetise their debt and, in the process, sounded the death knell of their currency's role as a key or reserve currency.

When the UK did this, there was another currency waiting in the wings to take over as the world's "reserve currency". That currency was, of course, the US Dollar. Having gained the sole global reserve currency role after the 1944 Bretton Woods agreement, the US abused the privilege to the point where, in 1971, it could no longer maintain its Bretton Woods mandate to REDEEM the US Dollar on demand (by foreign governments and/or central banks only) at a rate of $US 35.00 for one troy ounce of Gold.

The HUGE historical change that took place in 1971 was that the US Dollar was NOT dethroned as the global reserve currency. There was no viable replacement, as there had been in 1944. Instead, the US declared its paper money to be purely fiat - redeemable in NOTHING. The rest of the world followed suit and by early 1973, the world was on a global PAPER money standard for the first time since the standardisation of Gold in coin form as money nearly three millenia ago in 700 BC.

It has taken almost exactly 36 years, but the global fiat system which was set up in March 1973 has now imploded. With the Fed's decision at their FOMC meeting on March 17-18 to buy Treasury debt with its own "Federal Reserve NOTES" (aka US Dollars), there is nothing left in its manipulative arsenal. The ultimate absurdity of a global financial system based on IOUs payable in more IOUs has finally been reached. The present fiat money system based on debt and "supported" by the paper of history's biggest net debtor is doomed. It was always just a question of "when". That question was answered on March 18.

The evidence of that is all over the markets. Treasury yields dived precipitously (and prices rose) immediately after the Fed announcement in a knee jerk reaction that the Fed would succeed in lowering longer-term rates by buying the longer-term debt paper. The US Dollar fell even more precipitously, wiping almost three full points off the USDX in 48 hours. And Gold went into paroxyms. In the immediate aftermath of the Fed announcement, the spot future price plummeted below $US 900. Then, in after hours trading on March 18, it soared well over $US 50. On March 19, spot future Gold had one of its biggest one day rises ever, up $US 69.70 on the day.

The idea that a currency can retain its global reserve status in a situation in which its central bank is forced to buy government debt paper to postpone a terminal meltdown in the system itself is absurd on the face of it. The Fed has already gone most of the way to destroying the current credit based banking and financial system. If it makes good on its promise of March 18 and DOES start to monetise the debt of the US government, it is going to destroy the US Dollar as well.

In the lead up to the April 2 G20 Heads of State summit in London, there is already much talk about "replacing" the US Dollar as the world's reserve currency. So far, the only alternative NOT being mentioned is the only one which will ultimately work. That, of course, is Gold. Meanwhile, the tragedy continues as the global powers that be continue to dig a grave for the present credit based fiat money system in their doomed attempts to "save" it. Not only can it not be "saved", the sooner it is replaced with a system based on SOUND money, the better - for ALL of us.

[patsy]

[B][SIZE="4"]

In the lead up to the April 2 G20 Heads of State summit in London, there is already much talk about "replacing" the US Dollar as the world's reserve currency. So far, the only alternative NOT being mentioned is the only one which will ultimately work. That, of course, is Gold. Meanwhile, the tragedy continues as the global powers that be continue to dig a grave for the present credit based fiat money system in their doomed attempts to "save" it. Not only can it not be "saved", the sooner it is replaced with a system based on SOUND money, the better - for ALL of us.

If there were one positive outcome from the current economic meltdown would be the disappearance of fiat currencies. However, given the overall populist paradigm of most governments around the world (from Rudd to Obama) and the thinking of most central bankers (from Bollard to Bernanke), a change towards hard currency would have a very low chances of ever happening. There is no way that hell-bent welfare states like we are experiencing throughout the West will bow to a currency they cannot manipulate. And third world would hate to lose the a mortal weapon they have: competitive devaluation.

It would be a dream if it happened..... it would ensure prosperity for the next generations but politicians, as we know them, prefer fictitious growth at the expense of serfdom for the next generation.

[Aussie]

If there were one positive outcome from the current economic meltdown would be the disappearance of fiat currencies. However, given the overall populist paradigm of most governments around the world (from Rudd to Obama) and the thinking of most central bankers (from Bollard to Bernanke), a change towards hard currency would have a very low chances of ever happening. There is no way that hell-bent welfare states like we are experiencing throughout the West will bow to a currency they cannot manipulate. And third world would hate to lose the a mortal weapon they have: competitive devaluation.

It would be a dream if it happened..... it would ensure prosperity for the next generations but politicians, as we know them, prefer fictitious growth at the expense of serfdom for the next generation.

Agreed - unfortunately. But a glimmer of hope exists since there's a good chance when the USD collapses, the system may get smashed back to the stone age - so to speak.

I can't see the Chinese, Russian's and Saudi's allowing the US to dominate the financial landscape any longer. The damage at this point is too great. In the future, they are going to want more than pieces of paper in exchange for their hard assets.