Reader Thoughts on "The Tale Of Two Metrics" Part 2
irrelevant111 The Grand Design -- As we attempt to understand n adapt, one thing is certain, nothing is set in stone. There are grand works in play for those of power, yet they have been held in check to some extent.
As we gaze on the field of view, ME, Africa, Ukraine, etc… It becomes clear who is disrupting world peace. I leave it to those on this blog to decide.
What i do see is the Bear n Dragon doing much to establish balance in some respect n r playing the game more efficiently than the west. Mr. Putins recent speech on youtube is a testament to their strategy. Remember the art of war, Sun Tsu speaks volumes.
The well defined plan of the central banks have flaws that hopefully will become their downfall as time moves on. Always remember the flaw in man, EGO. Lets hope for balance as we seek truth n justice. Best to All
irrelevant111 Mr. Collins Dont expect u to listen to Mr. Putin entire discourse, but u should find value in its content. Be Well
Putin at Valdai – World Order: New Rules or a Gam…: http://youtu.be/9F9pQcqPdKo?
Dripfood JC, what exactly are the low liquidity assets that nobody wants, though were bought by the central banks during QE?
JC Collins The low liquidity assets were treasury bonds and mortgage backed securities. The Fed gave its member banks cash reserves in exchange for these bonds.
There was no net increase in the money supply. When the next crisis hits the central banks are not going to be able to increase liquidity because they are holding these toxic bonds. As stated, SDR denominated bonds will be used to address the liquidity tightening.
Cramley Tbonds are HQ collateral. Very liquid and much in demand by shadow banking. The Fed’s QE was meant to makeup for slack in foreign reserve growth of dollars and to keep IRS swaps from being triggered. Unfortunately by gobbling up so many TBonds it starved the system of HQ collateral.
Agency bonds are less liquid. QE for them was really a mechanism to bury the fraud, bury the counterfeit mortgages in a Chernobyl sarcophagus never to see the light of markets again.
And look what happened when “overt” US QE ended. BOJ decides to adopt Ben’s 2002 “Making Sure Deflation Doesn’t Happen” prescription. . “GPIF set allocation targets of 25% each for Japanese and overseas equities, up from 12% each, it said at a briefing in Tokyo.
The pension fund will reduce domestic bonds to 35% of assets from 60%.” I betcha what they aren’t telling anyone is what the other 15% is for.You think gold might be in there somewhere?
And the 25% for foreign equities, how much of that will go to gold shares? Maybe that’s why the BIS dumped 50 tons of paper gold.
To get the whole gold sector, metal and shares, down so that a monumental debt for equity swap operation can be performed by these whale funds w/o gunning prices to the moon before everyone is secured with a lifepreserver.
JC Collins “The Fed’s QE was meant to makeup for slack in foreign reserve growth of dollars…” It was an exchange not a net increase in volume. The Fed took back the low liquid assets for high liquid cash reserves.
matt (@speedspirit42) JC So the day QE ends Gold and Silver get smashed. Before we had QE money finding its way to banks to short Gold And Silver and now without missing a beat BIS starts.
If they are just starting to leverage up against G&S then we have a lot more downside to see. Andrew Maguire had this to say “First thing this morning, after the Bank of Japan decision, things got a bit roiled.
But what I did see was a fully-timed algorithm kick off at exactly 7 AM U.K. time.
There is only one seller that can come up with 50 tons of paper gold in a matter of 3 or 4 minutes and that is the Bank for International Settlements. “We saw this come through and it attacked the entire (massive) bid stack (defending the previous low of $1,180) in a matter of seconds.
Obviously there were visible stops. They (the Bank for International Settlements) knew exactly what they were attacking there. It was purely paper gold. We are talking about 50 tons, Eric. That’s an awful big position for somebody to put on (as) a risk position in a single shot.”
I suspect they have no choice. If I knew what I know now thanks to you I would of bought land years ago and not Gold. Silver I have hope for.
Roger Parness Faith in AG and AU Russia and China are stacking too.
Sometimes doing the right thing isn’t profitable….. in the short run….
“No international agreements, no diplomats, and no supernational bureaucracies are needed in order to restore sound monetary conditions.
If a country adopts a non-inflationary policy and clings to it, then the condition required for the return to gold is already present. The return to gold does not depend on the fulfillment of some material condition.
It is an ideological problem. It presupposes only one thing: the abandonment of the illusion that increasing the quantity of money creates prosperity.”
Ludwig von Mises
“Money, when considered as the fruit of many years’ industry, as the reward of labor, sweat and toil, as the widow’s dowry and children’s portion, and as the means of procuring the necessaries and alleviating the afflictions of life, and making old age a scene of rest, has something in it sacred that is not to be sported with, or trusted to the airy bubble of paper currency.” Thomas Paine
Reporte Dragon NOVEMBER 1, 2014 AT 11:07 PM Well JC you are still thinking if the global markets will be controlled by the IMF or any other traditional funding as the last 100 years.
You see the macro, but have forgotten the micro. If there is no good money (I mean gold backed) there will be no means to invest into production.
New dollars will be needed and they will need to ERASE the old dollar to set up a new system. New accounting, new system, new dollars, new management and new approach and new era.
JC Collins NOVEMBER 2, 2014 AT 1:31 AM Nope, haven’t forgotten the micro.
Dripfood NOVEMBER 2, 2014 AT 12:17 AM I heard this nice story about an alternative way of storing value. It was told by a westerner studying some native tribe in the Amzone basin.
This native indian came back from hunting with a big boar. Although it was a special and valuable catch, the same night the whole of the boar was cooked and shared with everybody in the tribe.
Because a smaller catch was not regularly shared, the western huest asked the hunter why he didn’t dry and store his meat for futere consumption. The native man laughed and said: “But I did store my meat. I just stored it in the belly of my brothers. And when I need anything in the future, they will help me provide. ”
Maybe we could start learning to store true value in the hearts and minds of our brothers and sisters instead of in gold and silver or any other instruments of greed and separation. Isn’t it a fools errand to search for preciousness in metals? ….. or in matter in general?
Jeremy Moore NOVEMBER 2, 2014 AT 1:09 AM JC, An argument a few different people have presented me is this; China and Russia are simply acting as if they are going along with the script in order to take the BIS apart from the inside out.
I can’t say my command of the material qualifies me to oppose that angle. Could you please enhance my understanding so that i get a clearer picture. Thank you.
Ozymandias 3 NOVEMBER 2, 2014 AT 2:06 PM Mr. Collins, I am interested to read your commentary and opinions as to how China and the Comex will likely respond if the physical gold and silver orders that have been paid for by the ChiComs is not actually delivered and can not be delivered because the gold silver sold on the Comex no longer exist.
JC Collins NOVEMBER 2, 2014 AT 2:34 PM Are we just assuming it doesn’t exist? Outside of that I’d say there isn’t enough information available to make a further analysis or to determine an outcome.
It is extremely unlikely that such a situation would materialize, considering the level of joint-engineering which is taking place.
There is so much fear based misinformation out there on this topic that I’d hate to comment further. Perhaps we will discover some hidden gem of information buried in the official publication of some institution or another.
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A TALE OF TWO METRICS
Deflation & Why QE Didn't Cause Hyper-Inflation