Mainstream Media Disconnects from Reality on Subject of US $

[wwswimming]

"Stocks fall for 3rd day as dollar strengthens"

... say the Yahoo headlines.
http://news.yahoo.com/s/ap/20091120...zZWMDeW5fdG9wX3N0b3J5BHNsawNzdG9ja3NmYWxsZm8-

if the dollar is strengthening, why is gold closing above $1150 ? industrial demand for gold has fallen the last few years.

http://www.kitconet.com/charts/metals/gold/t24_au_en_usoz_2.gif

THE DOLLAR IS NOT STRENGTHENING.

nobody makes that case better than 'Kenninger', Karl Denninger -
http://market-ticker.denninger.net/

one more sign that the markets are nervous about the dollar is the reaction of the gold and currency markets to the revelation that the Indian central bank was buying $7 billion worth of gold 2 weeks ago.

http://www.bloomberg.com/apps/news?pid=20601090&sid=aUm.roGyeOR0

the markets reacted to that announcement the same way they reacted to the news in March 2009 that the US government was monetizing $300 billion worth of debt.

3 background facts - the Indians are the world's biggest holder of gold. partially for cultural reasons - they just like gold.

#2 - the purchase of $7 billion worth of gold by a large central bank is ROUTINE - normally. it's like having an article about a healthy bowel movement; normally that does not cause the dollar to dive and gold to jack 5-10% in one day - which is what happened.

#3 China, Japan, and Saudi Arabia are sitting on $trillions. actually that's a stretch for Japan, they're hold close to a trillion in US debt. what if some central bank had announced they were buying 1000 tons of gold ? if they got the same price India got, that would only cost $35 billion.

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CLIFFs -
* the currency & commodity markets are showing a historical amount of anxiety about the value of the US $
* Yahoo is running articles talking about how STRONG the dollar is.
* I'm calling BULLSH*T on Yahoo's financial reporting.
* I felt compelled to put side-notes below because I love talking about this stuff.

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Side note - a lot has happened in the gold markets the last year. Germany has asked to have their gold (3-4000 tons) moved from a vault in NYC to vaults in Germany. China has asked to have their considerable gold holdings moved from London to Hong Kong.

Key rumor yet to be substantiated by Bloomberg - the gold-plated Tungsten Gold Bricks that were discovered by Hong Kong & originated in the US
http://www.marketoracle.co.uk/Article14996.html

60 tons of gold bricks, each weighing 400 troy ounces (about 28 pounds), are REPORTED to have come out of a US gold repository. They were purchased by China.

Tungsten is close to the same density as gold, and obviously much cheaper, that's why it is used for counterfeit gold.

 

[Modelworks]

I was watching MSNBC last night, don't know why, just was. Anyway I watched for about 30 minutes before I couldn't believe what I was watching.

The reporters were saying things like " Universal Health Care is coming finally and it will be under $1 trillion and will save us 650 billion too", "The housing market is seeing a boom and should recover soon", "While unemployment has been high reports are that things are improving "

It was like watching a propaganda news station from China. The amount of untrue reports on both the positive and negative sides is amazing.

 

[GTaudiophile]

Actually, the US has BY FAR the world's largest stockpiles of gold...more than double the number two country.

 

[kylebisme]

Our media has been more propaganda than news for a long time, it's just becoming more so to the point of absurdity lately. This is one of the reasons I wound up ditching cable.

 

[brxndxn]

I've been calling a bullshit on pretty much half of the 'financial' articles.. It seems there is so much crap out there just to confuse the small investor. I even read a laughable article in Business Week magazine that stated that US Productivity per worker was plummeting...

 

[bfdd]

Lets not forget that Obama just went to China and odds are they want to peg their currency from like 6.5 Yuan to 1 Dollar to 4 Yuan to 1 dollar. The dollar isn't strengthening.

 

[FaaR]

Interesting story about the fake gold bars. Too bad though the linked article is pretty much all supposition though, with very little in the way of verifiable sources.

Also, tungsten and gold's densities are rather similar, but not exactly the same... Tungsten is a great deal harder too, so just whack that gold bar with a hammer and see what happens... Heh.

 

[bob4432]

nothing to see here, carry on....

 

[mumedina]

The bad part out of all of this is that nobody seems to be talking about the inflation that should hit within the next year or two. It will be interesting to see how the Fed will manage to control inflation without raising interest rates too high that it stifles economic growth. It is a very delicate balance. I sure hope they know what they are doing.

If I learned anything from my economic classes is that when you artificially increase the money supply, inflation is sure soon to follow. I think the major world governments are fully aware of this and preparing themselves by hoarding as much gold as possible. They see and impending crash of the dollar.

'inflation is always and everywhere a monetary phenomenon'

 

[wwswimming]

Actually, the US has BY FAR the world's largest stockpiles of gold...more than double the number two country.

the US government HAD a large stockpile. until it's audited, it's a big question mark.

http://en.wikipedia.org/wiki/Official_gold_reserves

(US @ 8100 tons - un-audited, Germany @ 3100 tons)

gold in private hands - India is considered to be the largest holder. this guy makes a SWAG at 15,000 tons but mis-estimates the value of 15,000 tons.
http://www.nowpublic.com/world/indias-gold-holdings

in the tutorials for 3D Max 7, the opening illustration was done by an Indian guy, Rameswaran something. it's of some Indian royal crown, solid gold.

there's a good book called "Ship of Gold in the Deep Blue Sea". it's about an engineer named Tommy Thompson who is good at submarine technology. he is part of a team that discovers a shipwreck off the East Coast of the US. it's a boat full of original '49'ers, carrying gold from San Francisco to somewhere on the East Coast. it goes down in deep water in the 1850's, then Thompson's crew comes back in the '80's & '90's to dig it up. of course, it's not a walk in the park, it's in about a mile of water. $1 billion+ worth of gold then, would be $4 billion+ today. US gold.

http://www.amazon.com/Ship-Gold-Deep.../dp/0871134640

It is a very delicate balance.

no kidding. a lot of money (many $trillions) was created via credit derivatives in the 1995-2007 time-frame, then a lot of that money was revealed as bad debt in the time-frame 2007-2009. most of it was swept under the carpet.

in the meantime, the US government (including the Fed) started the printing presses.

while interest rates are 0% and a good rate on a CD is 2%, banks are back loaning money at 5%. the banks are building their reserves back up, quietly pretending that they're solvent.

so at this point it's very difficult to estimate how much money is in circulation. speaking of shipwrecks, there's enough fraud in the US accounting system (remember Bernie Madoff was head of the SEC; Greenspan told the head regulator of the CFTC not to worry about fraud ?!) to make an accurate accounting impossible.

can't wait till Geithner's next trip to China to tell them how sound the US dollar is. http://www.telegraph.co.uk/finance/...r-insists-Chinese-dollar-assets-are-safe.html

"In his first official visit to China since becoming Treasury Secretary, Mr Geithner told politicians and academics in Beijing that he still supports a strong US dollar, and insisted that the trillions of dollars of Chinese investments would not be unduly damaged by the economic crisis. Speaking at Peking University, Mr Geithner said: "Chinese assets are very safe."

The comment provoked loud laughter from the audience of students."

 

[sandorski]

The $US can strengthen and Gold Price remain unchanged due to Speculation. They don't move in a 1:1 manner. Especially if your only talking about a few days stretch.