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iShares TIPS Bond Message Board

jshaef1 25 posts  |  Last Activity: May 20, 2015 11:47 AM Member since: Mar 4, 2009
  • Gold / XAU Ratio
    16.71 near noon Wed May 20 2015

    The next option expiration for the precious metals on the Comex will be next Tuesday the 26th. Looks like typical monkey hammering and running the stops til then. They either take it under 1200 again or there has indeed been a sea change on the price of actual gold.

    Still time to scarf up best bargains in gold stocks since 1942--not a misprint.

  • jshaef1 by jshaef1 May 15, 2015 1:39 PM Flag

    Avery Goodman wrote the above Cina Plans posts.

    There is no logical reason for China to collect all that gold... then continue to let the west price it.

    The US did something similar in 1933... collected as much gold (confiscated from its citizens) ... then revalued it higher in dollar terms (a dollar devaluation).

    China will remove the peg from the dollar, revalue the Yuan down with the higher gold price determined on the Singapore Gold Exchange (which is largely Chinese gov't. controlled) and wait for (higher) rates to implode the US bond bubble or wait for the fed to print its way out of the USD$ reserve currency!

  • jshaef1 by jshaef1 May 15, 2015 1:37 PM Flag

    In short, a cheap yuan policy, using gold as the
    intermediary, immediately inflates the value of the dollar
    against the yuan. This makes American goods less competitive
    both at home and in foreign markets, inducing a
    money-printing response.

    Printing new dollars, of course, can reduce the value of the
    dollar. However, if we print enough new dollars to match
    China's cheap yuan policy, the dollar's credibility as the
    world's reserve currency will be gone, and America's
    signeurage profits will be gone too."

  • jshaef1 by jshaef1 May 15, 2015 1:35 PM Flag

    "If China increases the number of
    yuan required to buy a troy ounce of gold, for example, the
    USA must allow the dollar gold price to rise with it. If
    not, the yuan will fall against the dollar. In other words,
    China will determine the value of the US dollar on world
    markets, not the USA. That shifts the power and leverage
    away from Washington DC and toward Beijing, and will have a
    dramatic effect on the financial strength of the US

    Once China has enough gold, it will bid up the
    yuan-denominated price into the stratosphere. Once it does
    that, there are only three choices. First, maintain
    credibility and the reserve currency status by refusing to
    change the price of US dollar denominated gold. If it does
    that, domestic industries will be crippled by Chinese
    competition, because the yuan will become very cheap in relation to the dollar.
    Second, allow the dollar denominated
    price of gold to skyrocket in synch with the yuan
    denominated price. That will end the US dollar's reserve
    currency status. Third, kow-tow to Beijing, seeking a seal
    of approval from China for any serious financial

  • Reply to

    Trends--forget all the noise!!

    by jshaef1 May 2, 2015 5:59 AM
    jshaef1 jshaef1 May 14, 2015 2:52 AM Flag

    "Markets trade on anticipation of where economic data will stand three to six months down the road. The big selloff in sovereign debt is telling us that global investors see major economies mired in the hangover of the 2008 crash indefinitely with deficit spending on infrastructure soon to replace Quantitative Easing (QE) as the new monetary tool to ward off deflation.

    To think about this from another angle, recall what happened in the period from early November 2010 to mid December 2010 after the Federal Reserve announced QE2, its plan to buy $600 billion of longer term Treasuries. Because the Fed was going to be shrinking the supply by $600 billion, the market reaction should have been to drive yields down. Instead, from early November to mid December 2010, the yield on the 10-year Treasury spiked from 2.50 to 3.50 percent.

    The market at that time was not looking at the quick fix from the Fed, it was focusing on an intractable problem of getting the U.S. economy off Fed life support and the mountains of sovereign debt that would result if there was no long-term solution to QE Infinity.

    The global rout in sovereign debt markets is a collective epiphany that we’re six years and counting from the 2008 crash and we’re still on central bank life support."--Global Bond Rout: What’s Really Behind It
    By Pam Martens: May 13, 2015

  • A buyer of 10-year German bunds last Friday was willing to accept an annual yield of 15 bps. That same buyer lost 210 bps of principal on those bonds this week, as yields surged 22 bps.

  • "Merryn: Are you still holding a lot of gold in your own portfolio?

    Tim: Yes.

    Merryn: How much?

    Tim: It’s a lot. I mean… it’s a lot. It’s more than I would advocate any other person or entity held. But, no, I’m perfectly relaxed, because I’m playing a long game.

    Merryn: So, the average person – how much gold do you think they should be holding in their portfolio?

    Tim: I think, for any asset, in the interest of true diversification you need to be at least, let’s say, 10% committed otherwise it’s meaningless, it’s completely marginal. So depending on people’s appetite, risk tolerance, requirement for income, I’d say anything from 10 to maybe 25-30% is prudent. It’ll look more prudent if the price clearly starts to recover, and I sense that we may be close to some kind of a low. Everybody hates this thing! So, you know, just from a contrarian perspective now is probably not a bad time to be buying either gold or gold miners.

    Merryn: Brilliant. Tim, thank you very much.

    Tim: Thank you."

  • Monkeyhammers never die--$250 to BGEIX today--I guess its all relative--down 85% compared to gold since 1996 (miners v. gold). If we go down to 90%, who will frigging care? Miners will not go away in a Ponzi money world.

    0.3799 May-96
    - 0.0596 Apr-15


    0.84311661 84.31% XAU:GOLD down since May 1996

    We were at over 85% last month--worst bear in S&P was -86.2%--almost there.

  • Reply to

    IMF warns

    by jshaef1 Apr 19, 2015 6:14 AM
    jshaef1 jshaef1 Apr 20, 2015 5:30 AM Flag

    "Muni bonds are issued by cities and states and are a source of tax free income to wealthy individuals. In a world hungry for income, why are millionaires avoiding these bonds? Simply because local and state politicians have been overly generous with their union employees’ pay and benefits, and now many, if not most local governments are near the point of insolvency.

    Municipal bonds, like all bonds in 2015, have large derivative positions riding on them. The consequences of a bond debacle anywhere in the world would spread far and wide. The bull market in financial assets that began in the early 1980s could very well come to an end in 2015, providing the rocket fuel necessary to launch gold and silver into the stratosphere as trillions of dollars flee counterparty risk. I’ll tell you a little secret: Mr Bear is the biggest precious metals bull there is."

    M Lundeen

  • so far

    Nov 5 2014 6.77
    Dec 16 2014 6.85
    Dec 23 2014 7.00
    Mar 10 2015 7.10
    Mar 17 2015 7.22
    Mar 31 2015 7.30
    Apr 9 2015 7.55

  • Reply to

    IMF warns

    by jshaef1 Apr 19, 2015 6:14 AM
    jshaef1 jshaef1 Apr 19, 2015 6:18 AM Flag

    The only reason the Fed would need to inject massive amounts of Treasuries into the global banking system is because there’s an extreme shortage. A massive derivatives accident requiring massive amounts of collateral to be posted has developed. If Treasuries are not available to post as collateral, while at the same time a massive amount of hypothecated (Treasuries out on loan, several times over) collateral fails are occurring, it will cause the banking system to seize up. ..
    Remember I suggested some time ago that the elitists like give us a warning before something bad is about to happen. As my colleague John Titus states: “the true elite aristocracy are polite criminals – they consider it gauche to flush the toilet while we’re in the shower without giving us a heads up.”

    This is why the IMF issued this warning yesterday for the financial media to publish:

    The so-called ‘flash crash’ on US bond markets last October and the collapse of the Swiss currency floor in January showed how quickly liquidity can vanish, acting as “a powerful amplifier of financial stability risks.”

    IRD website

  • jshaef1 by jshaef1 Apr 19, 2015 6:14 AM Flag

    A reverse repo is an operation which generally is thought of as being used as a tool to remove short term liquidity from the banking system...instead the massive operation was conducted to INJECT Treasury collateral into the global banking system. Treasuries are used as collateral against derivatives positions. It’s in a sense margin collateral for the big boys...

    When the value of the derivatives bet declines because the value of the underlying asset declines (think: Greek debt, oil debt), more collateral has to posted. Eventually, the market runs out of collateral and there’s a collateral short squeeze...

    Circling back to my postulation that a massive, ongoing derivatives melt-down has started, as the derivatives lose value, more Treasury collateral has to be posted. When the situation becomes extreme, collateral isn’t posted and counterparties begin to fail, especially if the counterparty can’t come up with the cash needed to remedy a derivatives bet gone bad. My bet is that the Greece situation ignited the problem and the collapse in the price of oil threw millions of gallons of napalm on the situation.

  • Reply to

    Doomed 2

    by jshaef1 Apr 3, 2015 6:30 AM
    jshaef1 jshaef1 Apr 14, 2015 6:39 AM Flag

    .No difference in higher lows yet--$100 min to BGEIX today and yesterday.

  • jshaef1 by jshaef1 Apr 3, 2015 6:30 AM Flag

    If there was ever a chance to corner a market and by that I mean, the element of production, this is it. Somebody is gonna realize that and its going to get interesting when the demand doesn't go away because the bankstas have only one plan--printing, and demand for more gold and silver outstrips the current supply.

    I don't think we will have to wait long for miners to double and then much more. Until then, the averaging will continue into any BGEIX weakness, even if we get further capitulation. BGIEX higher lows: But hey, who knows--the stock market corrected 89% from its high in 1929 in the summer of 1932, so maybe 85% is not enough for miners.

    Nov 5 2014 6.77
    Dec 16 2014 6.85
    Dec 23 2014 7.00
    Mar 10 2015 7.10
    Mar 17 2015 7.22
    Mar 31 2015 7.30

  • jshaef1 by jshaef1 Apr 3, 2015 6:27 AM Flag

    And after a meltdown caused by the bankstas, 2008-09, and massive money printing by all the world's central banks we sit at 5 cents under BGEIX price of 7.65, exactly 10 years later. Politicians' faith in the central banks is unshakable--so I suppose ours should be too? It is too laughable to read all the permabear doomsters--trader dans--martin armstrongs, etc about how gold stocks are doomed and have not corrected down yet--not enough Capitulation. If we haven't been DOOMED already, what is DOOMED?

    But hey, yeah maybe a downsize of 85% compared to gold itself in the last 20 years is not enough--should it be 90%, or maybe 95% (xau:gold ratio down 85% since 1994). Possibly--at this point who really cares? Eventually the bankstas will be called out on their money printing game and the last time I checked there still is a healthy demand for gold and silver--enough so that somebody better find more, and who might that be?

  • Reply to

    Will they hold?

    by jshaef1 Mar 14, 2015 8:25 AM
    jshaef1 jshaef1 Mar 29, 2015 6:14 AM Flag

    Nov 5 2014 6.77
    Dec 16 2014 6.85
    Dec 23 2014 7.00
    Mar 10 2015 7.10
    Mar 17 2015 7.22

  • Importantly, it has reached the point where the risks associated with a bursting global Bubble overshadow policy discussions and objectives. Policymakers now endeavor to completely repress market self-adjusting and correcting mechanisms (i.e. "quasi-Capitalism"). Bear markets and recessions have become completely unacceptable, as this historic Bubble's "Terminal Phase" runs its regrettable course...
    Truth be told, global central bankers have lost control of pricing mechanisms - both in the risk markets and with general consumer price levels. But instead of accepting the realities of a failing policy experiment, central bankers have succumbed to only more extreme monetary inflation. Global securities market Bubbles have inflated to historic extremes, while the policy course has shifted to countries manipulating currencies in hope of countering stagnation and deflationary forces ("currency wars"). At this point, an inflating "Financial Sphere" comes at the expense of A Progressively Maladjusted "Economic Sphere."

  • Traditionally, central banks would adjust bank reserve requirements and short-term funding costs in an effort to regulate bank lending and inflation. Government deficit spending would seek to boost economic activity, incomes and corporate profits. The resulting mix of real growth and inflation would bring about significant effects on securities prices. Moderate annual inflation in the general price level was viewed as greasing the wheels of commerce, bolstering debtors and holders of risk assets alike. Moreover, accelerating consumer price inflation could be countered with measures to tighten banking lending/Credit.
    These days, a momentous change in economic doctrine has policymakers openly targeting rising securities prices. It is believed that central bank Credit-induced wealth effects will stimulate spending, system-wide Credit expansion and, eventually, a steady 2% increase in the general price level. What began with the free-market advocate Alan Greenspan in the nineties (stealthily) nurturing U.S. non-bank Credit expansion, has regressed to open global government manipulation of sovereign bond, corporate debt, equities and currency markets.

  • Reply to

    Will they hold?

    by jshaef1 Mar 14, 2015 8:25 AM
    jshaef1 jshaef1 Mar 18, 2015 3:03 PM Flag

    INFLATION: Cutting money in half without damaging the paper.--HENNY YOUNGMAN

    Immediately following Fed announcement on the news wires:


    LOL--Henny Youngman smiles from heaven (or somewhere)!

    Come on BGEIX hold those higher lows!!

  • jshaef1 by jshaef1 Mar 14, 2015 8:25 AM Flag

    Nov 5 2014 6.77
    Dec 16 2014 6.85
    Dec 23 2014 7.00
    Mar 10 2015 7.10

    Don't really know if these will hold--we have almost a perfect three peaks of the dome in the GOLD:XAU ratio and three bottoms that are higher lows--but of course nothing tells the future.
    See also traders talk topic 92028. Still buying small amounts of BGEIX into this weakness about daily.
    See also three peaks and a domed house.

112.93+0.19(+0.17%)May 22 4:00 PMEDT