Is The CME's 150% Hike In Gold Collateral Just A Ploy To Increase Amount Of Legally Confiscatable Gold?
Earlier today the CME did something quite contrarian to its nature: it validated gold by a factor of 150%, when it announced that the amount of gold bullion that customers can post as collateral is increasing from $200 million to $500 million. To confused NYU adjunct economics professors this means that the credibility of gold in the global monetary system just increased by more than ever before. Regarding the stated reason for this move "the Chicago-based company said that the change will allow market participants to better manage their risk and to take advantage of lower gold lease rates." As for the real reason for this surprising move we are unsure: whether it is due to an actual shortage of dollar dollar bill margin as collateral or some other reason we don't know. In fact, we are confident the CME will likely hike gold margins once again as soon as gold approaches $1900 shortly. But at least it has finally tipped its hand as to how even the biggest US futures exchange feel about the yellow metal. Of course, the end result is that should gold, just as cash, be used to collateralize stupid transactions which result in margin calls, the collateral will be confiscated. Therefore, one would be forgiven if one assumes that this is merely a ploy to more than double the amount of perfectly legally confiscatable gold in the capital markets. Which of course would mean that someone, somewhere would be interested in procuring far more physical gold than is already in possession. But that's just crazy talk. Why would one want gold, especially at these near record prices, when one can have glorious spam?This collapse is bigger than governments and central banks, Turk tells King World News
COMEX owner tries to lure more gold out for bullion bank leasing
Goldman Raises US Recession Odds To 40%; Sees More Fed Easing, Expects Recession In Germany And France
We won't comment on the supreme imbecility of being able to predict something as amorphous as a recession in decile increments, but for what it's worth, here it is. Just out from the crack Goldman tag team of Hatzius and Dominic Wilson, who usually don't work together unless they have to make some big statement: "We now see the risk of a renewed US recession as around 40%." (this was 30% before - expect every other Wall Street idiot to follow suit with an identical prediction). Also, those wondering if Goldman is content with getting shut out on its IOER cut demand, we have the answer: no. To wit: "We expect additional easing of monetary policy beyond the ‘operation twist’ announced recently, although this may not come until sometime in the first half of 2012. In addition, the market’s focus on changes in the Fed’s guidance on future policies - including a greater emphasis on the employment part of the ‘dual mandate’ and/or a temporarily higher inflation target - is likely to intensify." Lastly, as relates to the saving grace in Europe, little surprise there - Goldman, whose plant Mario Draghi is about to take over the ECB, expects the very same ECB to open the spigots: "The increase in financial risk is likely to lead the European Central Bank to ease its liquidity policies further this month, and the economic weakness will probably result in a cut in the repo rate by 50bp to 1% by December." As for European economic prospects, well, sacrifices will be made: "we now expect a mild recession in Germany and France, and a deeper downturn in the Euro periphery." And with a former Goldmanite about to take over the European money issuance authority, we have a bad feeling about what will transpire in Europe after October 31, when Trichet finally exits stage left.
Goldman Slashes EURUSD Forecasts Further
In tonight's data dump, in which Goldman has just slashed its forecast for the world economy and now sees a recession in France and Germany, among the actionable idea is the following update by forecast farce Thomas Stolper, whose batting average over the past 2 years is precisely 0.000 (go ahead, we dare you to calculate it). Instead of seeing a 1.40, 1.45 and 1.50 for 3, 6 and 12 months, the perpetually wrong Goldman FX team now expects 1.38, 1.42 and 1.48 in the EURUSD cross. From Stolper: "Given the latest global forecast revisions—and in particular the more marked downward revisions to our Euro-zone growth profile—we are shifting our EUR/$ forecast path slightly lower again and discuss potential additional downside risks. These changes follow a more substantial revision published in our latest Global FX Monthly Analyst. Despite these revisions, however, our strongest conviction remains that the underlying broad Dollar weakening trend remains intact. This is also reflected in the clear upward trajectory in our new EUR/$ forecasts of 1.38, 1.42 and 1.48 in 3, 6 and 12 months." Based on the tried and true strategy of always doing the opposite of whatever Stolper recommends, if anyone needed a catalyst to long the EURUSD, this is it.China Fires Back At US Senate Which May Have Just Started The Sino-US Currency Wars
A few hours ago, the maniac simians at the Senate finally did it and fired the first round in the great US-China currency war, after they took aim at one of China's core economic policies, voting to move forward with a bill designed to press Beijing to let its currency rise in value in the hope of creating U.S. jobs. As Reuters reports, "Senators voted 79-19 to open a week of Senate debate on the Currency Exchange Rate Oversight Reform Act of 2011, which would allow the U.S. government to slap countervailing duties on products from countries found to be subsidizing their exports by undervaluing their currencies. Monday's strong green light for debate on the bill bolsters prospects it will clear the Democrat-run Senate later this week, but prospects for action in the Republican-controlled House of Representatives are murky. If the bill did clear both chambers, it would present President Barack Obama with a tough decision on whether to sign the popular legislation into law and risk a trade war with Beijing, or veto it to pursue a more diplomatic approach." The response has been quick and severe: "China's foreign ministry said it "adamantly opposes" a bill pushed by the U.S. Senate that will allow the United States to impose duties on countries that undervalue their currencies." And just because China is now certain that the US will continue with its provocative posture, most recently demonstrated by the vocal response in the latest US-Taiwan military escalation, we would not be surprised at all to find China Daily report that China has accidentally sold a few billions in US government bonds... just because.Gold will rise as ECB and euro sink, fund manager Zulauf tells GoldMoney's Turk
Guest Post: I'm Pete And I'm Long. It's Been 36 Days Since I Was Long
I have been very bearish. I fought some strong moves up. I argued why certain things wouldn't work - and by certain things, I mean everything the politicians out of Europe said. I'm not planning on being long for long. Europe is fracturing, but France, without a doubt is still pushing for a solution. The data has been marginal, but not horrible. BAC was a disaster again today in terms of stock and then there is Morgan Stanley. I'm playing around for a quick bounce. I might be being too cute, but too many of the moves seem ripe for a rebound. I do think, as some smart commenter on ZH pointed out, that 1120 is now resistance rather than support. And with regard to Buffett, are we as a country, ignoring some people, who may not always be bullish, but at least have been right more often than not in the last 10 years? As a business and a country we should be looking for other oracles, and some of the best out there aren't always positive, but maybe that is what we, collectively need, a harsh dose of reality.And it starts. Qatari wealth fund plans $10bn gold buying spree. Arnt they buying the top of the bubble?
silvergoldsilver at silvergoldsilver - 26 minutes ago
"Qatar Holdings have done a systematic and detailed study of the gold
sector," said Ken Costa, who put the deal together. "They chose European
Goldfields because [chairman] Martyn Konig is very experienced – a 30-year
veteran in the gold market."
Click here to see entire article...:
Alex Jones Rant...
10/03/2011 - 17:13
10/03/2011 - 20:31
October 3, 2011, at 11:22 am
by Jim Sinclair in the category In The News |
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by Jim Sinclair in the category In The News |
Print This Post | Email This PostJim Sinclair’s Commentary
Consider each example like this a gold upgrade as currency.
More physical gold to serve as collateral: CME
Oct. 3, 2011, 2:43 p.m. EDT
By Myra P. Saefong
SAN FRANCISCO (MarketWatch) — CME Group said its customers will be able to post more physical gold as performance bond collateral, raising the amount to $500 million from $200 million as of the close of business on Monday. Performance bonds, or margin requirements, are money investors must put up to be able to trade futures contracts. Bullion customers had asked the CME to raise the amount, according to Harriet Hunnable, managing director of metals products at CME Group. “A number of our clearing firms hold gold in London and want to utilize more of it for collateral,” she said. “The interest rate for gold is currently negative so this means that it is very cost efficient for a holder of gold to place it as collateral.”
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