Billionaire Hugo Salinas Price – Central Banks Smashed Gold

Today multi-billionaire Hugo Salinas Price told King World News that central banks were definitely behind the smash in the gold price yesterday. He also said people should ignore it and continue buying gold and silver. But first, here is what Hugo Salinas Price had to say when asked about the plunge in gold yesterday: “I definitely think the central banks were behind it. I look at the graph of the gold price yesterday and when it collapses down $100 in about an hour, that is not natural market action. I think people are getting used to this. This is standard procedure and it doesn’t worry me at all.”

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via My Blog.

Gold Falls 3% in an Hour Following Bernanke Comments, Iran Trading with Bullion as “Universal Currency”

WHOLESALE MARKET Gold Bullion prices dropped 3.2% to $1727 per ounce in less than an hour Wednesday afternoon in London, after US Federal Reserve chairman Ben Bernanke appeared before Congress.

Higher gasoline prices are “likely to push up inflation temporarily while reducing consumers’ purchasing power,” Bernanke told the House Financial Services Committee.

Bernanke’s comments “eased speculation the central bank is moving closer to providing more monetary stimulus,” news agency Bloomberg reports.

The Fed chairman added however that the Fed’s policymakers judge “that sustaining a highly accommodative stance for monetary policy is consistent with promoting both objectives” of the Fed’s mandate, namely price stability and employment.

Earlier in the day, gold prices hovered around $1785 an ounce Wednesday morning London time, while stocks and commodities were also broadly flat following the European Central Bank’s latest attempt to boost the liquidity held by the continent’s banks.

Silver bullion meantime hit $37.36 per ounce, its highest level since last September, though they too fell following Bernanke’s comments.

“The next target [for silver] is $39.78, the September 2011 high,” says the latest technical analysis from gold bullion dealing bank Scotia Mocatta.

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via Gold Falls 3% in an Hour Following Bernanke Comments, Iran Trading with Bullion as “Universal Currency” – Buy Gold Online with the Bullion Vault – GoldSeek.com.

Richard Russell – Gold to Take Out $1,800 as Tangibles Soar

With many high net worth individuals continuing to exit paper money, today the Godfather of newsletter writers, Richard Russell, had this to say about gold, fine jewelry, fine art, the economy and more: “What we’re seeing now is flagrant divergence in the D-J Averages with volume sinking precipitously. This is a dangerous situation — acute divergence in the Averages on sinking volume — not good, not good at all. I feel that low volume in this case is highly significant. It’s as though the very heart of the market is whispering ‘caution,’ as the smart money pulls back on its buying. It’s notable that volume picks up on days when the market is down (a sign of institutional selling).”

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February 28, 2012

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Living In A QE World | The Big Picture

All Central Bank Balance Sheets Are Exploding Higher, Or Engaged In QE

The degree to which central banks around the world are printing money is unprecedented.

The first eight charts below show the balance sheets of the largest central banks in the world. They are the European Central Bank (ECB), the Federal Reserve (Fed), the Bank of Japan (BoJ), the Bank of England (BoE), the Bundesbank (Germany), the Banque de France, the People’s Bank of China (PBoC) and the Swiss National Bank (SNB). Noted on the charts are significant events or growth rates.

Shown is the size of each respective balance sheet in its local currency. Note that all are exploding higher as every chart goes from the lower left to the upper right. Most are still making new all-time highs. If the basic definition of quantitative easing (QE) is a significant increase in a central bank’s balance sheet via increasing banking reserves, then all eight of these central banks are engaged in QE.

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via Living In A QE World | The Big Picture.

Embry – Gold’s Rise Will Shock Market Participants This Year

With gold trading roughly $30 higher and silver breaking solidly above the $34 level, today King World News interviewed John Embry, Chief Investment Strategist of the $10 billion strong Sprott Asset Management, to get his take on where he sees gold and silver headed from here. Embry told KWN this will be, by far, the strongest year for gold during this entire bull market. Here is what Embry had to say about the situation: “The fact that sentiment is so poor with gold at these levels just indicates that people don’t realize what’s really unfolding. I think the price action to begin the year has been exemplary. It was interesting as gold was getting a head of steam going last week, out comes that bogus jobs report that led to the one day reversal in gold and silver.”

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via My Blog.

Why Silver Is As Good As Gold In A Monetary Collapse

We are at the edge of a major economic crisis. Our monetary system is the underlying cause of this major crisis. The massive debt bubble created by our monetary system is about to burst. The demonetization of gold and silver has over the years diverted value from these metals to all paper assets (such as bonds) linked to the debt-based monetary system.

The process of the devaluation of gold and silver, started by the demonetization of gold and silver, is about to reverse at a greater speed than ever before. This is similar to what happened during the late 70s (see my previous article), when the gold and silver price increased significantly. However, what happened in the 70’s was just a prelude to this coming rally. The 70’s was the end of a cycle, this is likely the end of a major cycle; an end of an era of the debt-based monetary system (dishonest money).

This era of dishonest money has filled the economic world with many promises that will never be fulfilled. There will be a massive flight out of paper promises into the ideal safe haven assets that would offer protection.

The type of assets that people will flee to depends on the extent to which the assets offer protection against the specific crisis. For example, if people are extremely thirsty, then most would likely go for water instead of milk or soft drinks. They would therefore rank water higher than soft drinks or milk. The reason that they would go for water is due to its superior properties for countering the thirst crisis.

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via Why Silver Is As Good As Gold In A Monetary Collapse – Seeking Alpha.

Why Are the Chinese Buying Record Quantities of Gold? – Forbes

This month, the Hong Kong Census and Statistics Department reported that China imported 102,779 kilograms of gold from Hong Kong in November, an increase from October’s 86,299 kilograms. Beijing does not release gold trade figures, so for this and other reasons the Hong Kong numbers are considered the best indication of China’s gold imports.

Analysts believe China bought as much as 490 tons of gold in 2011, double the estimated 245 tons in 2010. “The thing that’s caught people’s minds is the massive increase in Chinese buying,” remarked Ross Norman of Sharps Pixley, a London gold brokerage, this month.

So who in China is buying all this gold?

The People’s Bank of China, the central bank, has been hinting that it is purchasing. “No asset is safe now,” said the PBOC’s Zhang Jianhua at the end of last month. “The only choice to hedge risks is to hold hard currency—gold.” He also said it was smart strategy to buy on market dips. Analysts naturally jumped on his comment as proof that China, the world’s fifth-largest holder of the metal, is in the market for more.

There are a few problems with this conclusion. First, the Chinese government rarely benefits others—and hurts itself—by telegraphing its short-term investment strategies.

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via Why Are the Chinese Buying Record Quantities of Gold? – Forbes.

Volcker confirms central bank need to suppress gold to stabilize exchange rates at ‘critical point’

Volcker confirms central bank need to suppress gold to stabilize exchange rates at 'critical point'.

Fed To Markets: Buy Gold And Silver

The Fed just spoke. Here’s a slightly edited transcript:

Blah blah blah … the economy has been expanding moderately … blah blah blah boilerplate inanity blatant lie … the Committee seeks to foster maximum employment and price stability ….

To support a stronger economic recovery and to help ensure that inflation, over time, is at levels consistent with the dual mandate, the Committee expects to maintain a highly accommodative stance for monetary policy. In particular, the Committee decided today to keep the target range for the federal funds rate at 0 to 1/4 percent and currently anticipates that economic conditions–including low rates of resource utilization and a subdued outlook for inflation over the medium run–are likely to warrant exceptionally low levels for the federal funds rate at least through late 2014.

This of course comes as no surprise to anyone. But seeing it in print had exactly the impact you’d expect. Stocks erased their early losses, the dollar tanked, and precious metals soared. With good reason. It is now the stated policy of the US government to have negative real interest rates for years to come (eons in trader-time).

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via Fed To Markets: Buy Gold And Silver — DollarCollapse.com.

Bernanke lights a fire under gold and silver prices

“Party on!” was Federal Reserve Chairman Ben Bernanke’s message to Wall Street yesterday, as he announced that the Fed will be keeping interest rates at “exceptionally low” levels until late 2014, owing to concerns about stubbornly-high unemployment and the sustainability of the current statistical recovery. Bernanke also confirmed that for the first time in the Fed’s 99-year history, the institution will explicitly target a 2% inflation rate, as measured on the Personal Consumption Index (PCI). Other central banks have long had explicit inflation targets, but not the Fed.

Unsurprisingly given their enthusiasm for easy money, the market response to this move was euphoric. The Dow gained 0.64% to settle at 12756.96, while the Nasdaq tacked on 1.14% to settle at 2818.31. Asian and European exchanges have also reported gains this morning. Commodities such as copper and crude oil are up, while precious metals – ever sensitive to signs of more monetary easing from the Fed – notched impressive gains.

The gold price blew through overhead resistance around $1,680 with ease, and is now trading back above $1,700 per troy ounce. Silver broke through the $33 mark easily, which could be technically significant given that the price has been encountering stubborn selling around $32.50-$33 since last autumn. If silver can break through $35, and if we see signs that hedge funds are at last beginning to grasp that both the Fed and the European Central Bank are committed to more-or-less perpetual money printing – whatever euphemisms they may use to disguise this fact – silver has a real chance of starting the kind of trending move higher that we saw in late 2010/early 2011.

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via Bernanke lights a fire under gold and silver prices.