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Surprising Observations From Trimtabs: "are Central Bankers Loading Up On Gold?"

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http://www.zerohedge.com/article/surprising-observations-trimtabs-are-central-bankers-loading-gold

When it comes to following the trail of money, capital flows specialist TrimTabs has traditionally focused on the stock market. In the past, TrimTabs' Charles Biderman has discussed how according to any reasonable calculations, there appears to be a key buyer missing among the usual market participant suspects, leading Biderman to conclude that the Fed may be buying stocks directly (or indirectly through Citadel as the case may be). To our surprise, in its most recent release, TrimTabs takes a look at the buyers in the gold market, and ends up with the same question: "Gold prices hit a record high in nominal terms for the second consecutive day. We are not sure who is driving up prices." The speculative conclusion: "Are central bankers loading up on gold as they crank up the printing presses and keep interest rates ridiculously low?" Of course, at first glance this would be preposterous as it has long been accepted that for the Fed a jump in surge prices is a very adverse development. Well, is it? Traditionally rising gold prices have been merely indicative of abnormally high inflation, which for the Fed was a "bad" thing in the past. Not so much any more, or at least since the advent of the "wealth effect" experiment. Recall that it is now the Fed's "goal" to give the impression of inflation (and reality for those who eat and use energy). This is based on Bernanke's false assumption that inflation is much more easily controllable (15 minutes...) than deflation. So while on the surface this may appear to be a preposterous claim, in reality there is nothing that prohibits a gold price surge in the context of the Fed's third mandate.

......

Lastly, remember that there has been speculation that various banks are pushing for a mark to market treatment of gold held at central banks. Our own Fed marks its 8,133.5 tons of gold at $42.22/ounce. In other words, if at some point the central bank cartel needs to expand excess reserves even more, thereby creating an even greater "inflationary threat", what better way than to convert held gold from a fixed to a MTM price. For the Fed alone this move would imply a $350 billion "increase" in assets, which would then need a comparable increase in bank reserves (and currency eventually).

In an ironic twist, is gold about to become the "red button" to be pushed in the last ditch case when expectations of rampant inflation need to be created, following the next major deflationary market crash.

An interesting scenario.....

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Let's see now... well.... The Chinese are, so are the Russians, the Saudi's, the South Koreans, the Indians to name but a few...

The Koreans did something stupid, in 1997 when the IMF came knocking private individuals queued up to hand their gold to the government to pay off the IMF loan.

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Guest spp

The Koreans did something stupid, in 1997 when the IMF came knocking private individuals queued up to hand their gold to the government to pay off the IMF loan.

Didn't a certain PM do something like that? :ph34r:

Edit: At $250 oz :angry:

Edited by spp

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  • 311 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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