# Gold Down / Dollar Up On Anticipation FED Will Stop Buying Bonds



## haley4217

It seems to me that it's changed so many times that I'm finally admitting I'm confused. Wasn't it not to long ago that the dollars strength was based on the FED's buying of the +/- 85 Billion in US bonds every month? As I remember it a few months ago gold went up when there were rumors of the FED stopping or slowing down on bond purchases. Now, on Friday there are reportedly a few more jobs than anticipated and based on "feelings" that the FED will slow down bond purchases sooner than expected and Gold drops 2% and the dollar goes up. It seems to me that if the FED does slow down on bond purchases then those investors who "bet" on the USD$ will loose faith in it and it will fall so quickly that people won't have time to get out.


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## Tweto

There are smarter people on this forum then me, but I will say that every thing that I'm hearing and reading is saying that the dollar will be going up. Gold will be going down and the markets trending down starting late summer.


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## Immolatus

I have thought that the F3Ds real effect on the 'economy' is in the stock markets, their actions should clearly have a negative effect on the dollar. They, along with the other CB's are buying up the bonds to prop up their respective gubts (and to make money off the debt) and obviously for other reasons unknown to me. When they start the 'taper' the effects will be quick and painful in the bond and stock markets, or at least they should.
The dollar will keep rising until there is a better alternative.
It will be very interesting when China finally releases their newest gold holdings.


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## Meerkat

Never know what to do about money or gold anymore.


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## hiwall

Everything is so backwards now. When there is bad economic news the market goes up as they know the Fed will keep pumping in money. When there is good news the market goes down on worries the Fed will stop the money. 
With all the "new" money being printed the dollar should be devalued but with everyone in the world printing alot of money the dollar is more or less staying even. 
Gold is going down but demand for physical gold has never been higher so it should be going up. 
No one knows what will happen next.


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## Marcus

The Fed has been driving investors into the stock market by causing every other type of investment (bonds, CDs) to pay trivial returns. They've also abetted the fall in the price of paper PMs (a years worth of gold production is sold in *one day(!)*) in order to convince folks to play in the stock market.

The question to ask yourself is this: Are you a trader or are you in it for the long haul?

If you're a trader, then don't fight the Fed and go with the flow.

If you're seeking long term stability, ignore all the talking heads and other market noise. Buy what you know will retain its value during times of turbulence and keep a stout resolve about your choices.


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## invision

[QUOTE="Marcus".

If you're seeking long term stability, ignore all the talking heads and other market noise. Buy what you know will retain its value during times of turbulence and keep a stout resolve about your choices.[/QUOTE]

Nicely said and true.


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## partdeux

mark my words, by the end of summer we will have a 20% drop in market cap. Within two years, 50% drop.


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## Caribou

While I don't believe that there is often only one factor in the rise or fall in stocks or commodities I think the biggest factor now for gold is the dumping of paper gold.

The professional investors always reminded me of a flock of small birds. They dart left, right, up, down almost as one. They will see something tasty and land pecking madly till something, unseen to me, startles them and they flee in unison. I rarely perceive the reason for either flocks movements. I merely comment on the similarities.


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## Tweto

By the end of summer I will have my market exposure very small. I think that the markets will start to trend down and will trend down for the next 10-15 years. Yes there are experts that are saying that the markets will go to 20,000. I have heard this same thing back in 2000.

The markets will fluctuate and there will be times to make money but on the whole the markets will be going down and anyone that buys and holds will lose. 

If you had bought and held stocks for the last ten years you would only be a little higher then back in 2007. I did the math and found that on several widely held stocks that if you sold your holdings back in 2007 and then took the money and just put it in a CD paying 2% till now you would be ahead.

The best I can tell is right now is 2007 all over again. In other words sell soon.


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## BillS

Meerkat said:


> Never know what to do about money or gold anymore.


You want to limit how much cash you have in the bank because there's a danger that your money will be stolen to bail out the big banks like what happened in Cyprus.

You want to cash out your 401k ASAP because the government is going to force 401k plans to buy government bonds. In other words, the government will steal your 401k and leave you with worthless government bonds.

I bought some silver to protect myself during hyperinflation and possibly to make a pile of money with when silver reaches $100 an ounce. The price of silver will go up during hyperinflation and what you can buy with it will either stay the same or increase. At some point there will be panic selling of the dollar and panic buying of precious metals. When that happens there will be money to be made and you'd be able to use it to buy stuff you need.


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## BillS

haley4217 said:


> It seems to me that it's changed so many times that I'm finally admitting I'm confused. Wasn't it not to long ago that the dollars strength was based on the FED's buying of the +/- 85 Billion in US bonds every month? As I remember it a few months ago gold went up when there were rumors of the FED stopping or slowing down on bond purchases. Now, on Friday there are reportedly a few more jobs than anticipated and based on "feelings" that the FED will slow down bond purchases sooner than expected and Gold drops 2% and the dollar goes up. It seems to me that if the FED does slow down on bond purchases then those investors who "bet" on the USD$ will loose faith in it and it will fall so quickly that people won't have time to get out.


Gold and the dollar move in opposite directions when the gold market isn't being manipulated.

Gold and the stock market move in opposite directions too.

People should lose faith in the dollar anyway because the Fed is creating a trillion dollars a year out of thin air.

When QE stops, the treasury will have to raise interest rates so they can borrow money. The government won't be able to spend 50% more than it takes in so it will have to make drastic cuts in spending. Most likely, they'll stop funding food stamp cards, there will be massive riots, and Obama will declare martial law.


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## Tweto

BillS said:


> You want to limit how much cash you have in the bank because there's a danger that your money will be stolen to bail out the big banks like what happened in Cyprus.
> 
> You want to cash out your 401k ASAP because the government is going to force 401k plans to buy government bonds. In other words, the government will steal your 401k and leave you with worthless government bonds.
> 
> I bought some silver to protect myself during hyperinflation and possibly to make a pile of money with when silver reaches $100 an ounce. The price of silver will go up during hyperinflation and what you can buy with it will either stay the same or increase. At some point there will be panic selling of the dollar and panic buying of precious metals. When that happens there will be money to be made and you'd be able to use it to buy stuff you need.


When do you think that hyperinflation will start?


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## haley4217

BillS said:


> Gold and the dollar move in opposite directions when the gold market isn't being manipulated.
> 
> Gold and the stock market move in opposite directions too.
> 
> People should lose faith in the dollar anyway because the Fed is creating a trillion dollars a year out of thin air.
> 
> When QE stops, the treasury will have to raise interest rates so they can borrow money. The government won't be able to spend 50% more than it takes in so it will have to make drastic cuts in spending. Most likely, they'll stop funding food stamp cards, there will be massive riots, and Obama will declare martial law.


BillS also posted a new thread http://www.preparedsociety.com/forum/f77/gold-price-being-suppressed-help-china-buy-more-gold-19809/ where there is a very interesting discussion related to the suppression of gold prices to make it easier for China to load up on their physical gold holdings.

What I find interesting is that while gold prices are down, likely as most believe to the dumping of paper gold, the demand for physical gold is still high. Over the past couple of weeks there has been discussion in other threads on this forum about the demise of the dollar as the reserve for world economies and trade. This included many threads about China and whether they would try to substitute the Yuan or more importantly why would they?

I hate to quote from CNBC, but Stuart Oakley who runs the global Asian cash trading business at Nomura recently wrote an article for CNBC. http://www.cnbc.com/id/100726245

He stated; "Few would dispute China's end goal of having its currency, the Yuan, become a genuine world reserve currency. Who wouldn't want cheap access to world capital markets that reserve currency status brings? Not to mention cheaper transaction costs on international trade. Indeed most spectators also understand China's political motives in achieving reserve currency status for the Yuan (more voting rights at IMF, World Bank etc). However, what does seem to be lost on the financial world right now is how quickly they are getting there."

The crazy way that the markets are reacting today with what should be bad news send markets up, last month ending QE sends the dollar down now it send the dollar up, all of this adds up to me that the bottom line is to keep the price of gold and possibly silver as low as possible. This lets, among others, China load up on all of the gold at bargain basement prices. Then when QE does end and interest rates rise and the USD$ starts to slide, they can step forward with a gold backed currency that could step in and fill the shoes of the USD$.

The article on CNBC also states that there is approximately 11 Trillion in foreign exchange reserves according to the IMF. Of this about 3.72 trillion of the allocated reserves are in USD$. China owns between 4 and 5 trillion of the unallocated reserves. So, if the USD$ slides into oblivion then China stands in position as the number 2 owner of foreign exchange reserves readily placed to move the Yuan into the position of world reserve currency.

So am I seeing this wrong? Should part of prepping be taking advantage of this bargain basement pricing of gold in anticipation of the dollars slide, even though the "market" is telling us that gold is only going to go down and that the stock market is the place to be? I'm starting to look at this from an investment standpoint of survival instead of equity growth. Yes, I might be able to take my 401(k) and keep it invested in the market and possibly ride the market to 20,000 but then possibly loose it all to having to invest 401(k)'s only in Fed Bonds.


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## invision

haley4217 said:


> BillS also posted a new thread http://www.preparedsociety.com/forum/f77/gold-price-being-suppressed-help-china-buy-more-gold-19809/ where there is a very interesting discussion related to the suppression of gold prices to make it easier for China to load up on their physical gold holdings.
> 
> What I find interesting is that while gold prices are down, likely as most believe to the dumping of paper gold, the demand for physical gold is still high. Over the past couple of weeks there has been discussion in other threads on this forum about the demise of the dollar as the reserve for world economies and trade. This included many threads about China and whether they would try to substitute the Yuan or more importantly why would they?
> 
> I hate to quote from CNBC, but Stuart Oakley who runs the global Asian cash trading business at Nomura recently wrote an article for CNBC. http://www.cnbc.com/id/100726245
> 
> He stated; "Few would dispute China's end goal of having its currency, the Yuan, become a genuine world reserve currency. Who wouldn't want cheap access to world capital markets that reserve currency status brings? Not to mention cheaper transaction costs on international trade. Indeed most spectators also understand China's political motives in achieving reserve currency status for the Yuan (more voting rights at IMF, World Bank etc). However, what does seem to be lost on the financial world right now is how quickly they are getting there."
> 
> The crazy way that the markets are reacting today with what should be bad news send markets up, last month ending QE sends the dollar down now it send the dollar up, all of this adds up to me that the bottom line is to keep the price of gold and possibly silver as low as possible. This lets, among others, China load up on all of the gold at bargain basement prices. Then when QE does end and interest rates rise and the USD$ starts to slide, they can step forward with a gold backed currency that could step in and fill the shoes of the USD$.
> 
> The article on CNBC also states that there is approximately 11 Trillion in foreign exchange reserves according to the IMF. Of this about 3.72 trillion of the allocated reserves are in USD$. China owns between 4 and 5 trillion of the unallocated reserves. So, if the USD$ slides into oblivion then China stands in position as the number 2 owner of foreign exchange reserves readily placed to move the Yuan into the position of world reserve currency.
> 
> So am I seeing this wrong? Should part of prepping be taking advantage of this bargain basement pricing of gold in anticipation of the dollars slide, even though the "market" is telling us that gold is only going to go down and that the stock market is the place to be? I'm starting to look at this from an investment standpoint of survival instead of equity growth. Yes, I might be able to take my 401(k) and keep it invested in the market and possibly ride the market to 20,000 but then possibly loose it all to having to invest 401(k)'s only in Fed Bonds.


Well as I mentioned on a previous post, adding in recent news about Great Britain / China currency swap deal and china proclaiming the goal that pricing of yuan to be 1-1 ratio with USD by 2015, I am now thinking I will do a hedge bet on the yuen... At current 1-6 ratio, $1,000 USD would get $6,000 Yuen... In 2015, if 1-1, then my exchange back to USD would be a $5,000 increase.... Take profits and buy silver


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## Immolatus

Couple of comments
I don't get the idea that the ptb are helping China by keeping the price of gold down so they can acquire more, that doesn't make sense to me. That implies China is in on the whole deal, and also that that a gold standard is part of the plan, no?
As much as I read about the separation of physical and paper price and the drop in gold reserves, the guys at screwtape files seem to say differently. Their research is way over my head, but from what I can gather, the gist is that the physical is just changing hands but not actually moving, as in not leaving the vaults, so there is not really a run on phyzz on any large scale. What does seem true is that there is a high demand on a retail level, but does that have any real effect? I assume it would, but I'm just not really sure. The whole idea that average shmoes would want to buy it up as the price falls makers total sense, but is it happening wit the big boys, and most importantly, is it actually depleting comex and gld holdings? This seems to be a running theme for gold bugs, but is it true? 
Funny how not being able to write normally (I'm on my kindle) interferes with my thought process.? Watching falling skies isn't helping either.


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## faithmarie




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## BillS

Tweto said:


> When do you think that hyperinflation will start?


I think it starts anywhere from 3 months to 2 years. I don't see how we have more time than that.


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## Woody

I added another roll of Eagles to the pile today.


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## BillS

Immolatus said:


> Couple of comments
> I don't get the idea that the ptb are helping China by keeping the price of gold down so they can acquire more, that doesn't make sense to me. That implies China is in on the whole deal, and also that that a gold standard is part of the plan, no?
> As much as I read about the separation of physical and paper price and the drop in gold reserves, the guys at screwtape files seem to say differently. Their research is way over my head, but from what I can gather, the gist is that the physical is just changing hands but not actually moving, as in not leaving the vaults, so there is not really a run on phyzz on any large scale. What does seem true is that there is a high demand on a retail level, but does that have any real effect? I assume it would, but I'm just not really sure. The whole idea that average shmoes would want to buy it up as the price falls makers total sense, but is it happening wit the big boys, and most importantly, is it actually depleting comex and gld holdings? This seems to be a running theme for gold bugs, but is it true?
> Funny how not being able to write normally (I'm on my kindle) interferes with my thought process.? Watching falling skies isn't helping either.


It would make sense that the gold price is being suppressed so China could buy gold more cheaply if in exchange China keeps holding dollars and treasuries. I think the US government is suppressing the gold and silver prices to prevent a run on the dollar. Yes, I think China will go to a gold-backed Yuan at some point.

I think gold IS changing hands. I've read stories about how people who took physical delivery of their gold were seeing that the gold bars they got didn't have the same serial numbers as the gold bars on their statements.

Central banks are buying gold and so are a lot of wealthy people. The economy is bad and I'm sure a lot of people have had to sell their gold in order to pay their bills.

There seems to be a movement of gold on a global scale moving from Europe and North America to Asia.

There's a lot of talk on the web about a Comex default in gold and silver. Like this article:

http://seekingalpha.com/article/1398701-comex-gold-default-here-s-what-not-to-watch

Here is just part of it:

"Those who own physical gold and GLD, may be interested in the continuing drawdown of COMEX warehouse gold inventories that has been occurring over the last few months. This has been noted in gold blogs for a few weeks now, but what is interesting is that this is the biggest drawdown in COMEX gold since the beginning of the gold bull market."


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## Tweto

Roubini Forecasts 30% Drop For Gold Prices down to $1000.

His alias is Dr Doom. I don't follow him, but according to articles I have read about him said that he predicted the market dump of 2008. Don't know if its true


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## invision

Woody said:


> I added another roll of Eagles to the pile today.


I should have, instead I added 500 rds of 12ga 00, 500 - .44-40, 500 - .40S&W, and 500 - .22-250

Then as I was driving home, low and behold I had to cross the damn Chattahoochee River and I will be damned if my the back hatch on the Armada didn't fully open, at the same time I hit a pot hole and the whole bunch of ammo went out the back and over the rail into the river.


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## partdeux

damn, how was the pot?


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