Posts by "stationdealer"

Well noted by JPM.

To truly sterilize the ECB could:
(1) sell bonds out of its existing portfolio (but they're pretty much the same bonds they're planning on buying in)
(2) wait for existing holdings to mature (defeats the purpose again)
(3) sell other asset holdings i.e. gold (but that creates a relatively low upper limit for intervention)
(4) unwind LTRO funding prior to the 12mth anniversary. Perhaps. How many banks that took LTRO funds are now sitting on surplus cash at 0%? (i.e. have too much liquidity, and are eroding capital) Cutting the deposit rate below zero and releasing even more surplus cash into the system via bond purchases would strengthen the incentive. (only the ECB knows....)

Which leaves us with the less permanent options: a deposit facility or shorter-dated open market operations (i.e. repo out assets it is holding as a result of other monetary operations, such as LTRO collateral). At the short end, they don't sterilize anything or change the risk profile materially - just change the name of the facility. However, if cash were to be locked away for the tenor of the bonds purchased, then perhaps those facilities would do the trick too. After all, what makes some things QE and other things not? A bond purchased will mature eventually (or can be sold), an overnight operation like a repo (or discount window loan) can be rolled indefinitely. The difference lies in where credit risk sits, and thus where capital is required. That's what will drive the impact on the broader economy

Any seller in gold toady. Already stuck from 1389, I've decided to sell heavy from 1415 as i dont believe this can last long in the temporary short term momentum, environment. Till the Fed announces the measures to the next QE i think dollar pretty much will stay afloat and competitive for a while.

So selling from here long term is easy its not that its gonna hit 2000 without testing this years low of 1044 and pretty mush momentum close to running out. So if any one has any sense let in then they hold gold etf's carry the sellers leg down. cuz after the currency war is over its going to be commodity wars. Which we can see already showing some early signs.

"Ashraf Laidi
London, UK

July 30, 2010 13:15 ET
John, yes i see cable below 1.50 before yearend but not above 1.65

Ashraf"


CAN YOU PLEASE EXPLAIN HOW YOUR SO CERTAIN OF A DIP TO 150

WHAT ARE THE REASONS ?

Ron Paul: We Cannot Even Maintain the Zinc Standard
by Rocky Vega
The US Mint has had trouble keeping up with precious metal coin demand for most of this year, and it now appears the investigation into why thats the case may also consider the economics of penny and nickel production.

The US House Subcommittee on Domestic Monetary Policy has been looking into why there are backlogs at the Mint, especially with proof and uncirculated coins, and what can be done to improve the production process.

For quite some time its been easy to find disclaimers such as this on the US Mint website: Due to the continued, sustained demand for American Eagle Gold Bullion Coins, 2009-dated American Eagle Gold Proof Coins were not produced. The bullion coins are made available through authorized dealers and not directly through the Mint.

Mineweb has more details:

[Director of the U.S. Mint Edmond] Moy told the subcommittee uncertainty surrounding traditional investments and inflation concerns drove investor demand for bullion precious metals in all forms to exceptional highs in 2009.

As a result, the agency did not mint and issue what Moy called the very popular American Eagle One-Ounce Proof Gold and One-Ounce Proof Silver Coins in 2009.

Although bullion coin demand seemed to be subsiding earlier this year, in May, the Mint experienced an increase in orders for silver bullion coins to over 3.6 million coins. In fiscal year 2009, bullion coins sales reached an all-time high of $1.7 billion, nearly 80% above the sales of fiscal year 2008.

The Chairman of the Subcommittee, Congressman Melvin Watt (D-NC), is interested in diverting some of the precious metal coin blanks allocated for bullion coin production to supplement needs for numismatic coin production.

Separately, Director Moy also griped that, with regard to the one-cent and five-cent coins, never before has the nation spent more to mint and issue a circulating coin than its legal value. This problem is needlessly wasting hundreds of millions of dollars.

Dr. Ron Paul (R-TX) disagrees with the Watt and Moy perspectives because the Mint should not be gaining any additional power to decide the metal makeup of coins in circulation. Here is his language verbatim, again from the Mineweb article:

We could not maintain the gold standard nor the silver standard. We could not maintain the copper standard, and now we cannot even maintain the zinc standard, Paul noted. Paper money inevitably breeds inflation and destroys the value of currency.

Moy brings up a valid point. The US is spending more to produce pennies and nickels than they are worth. However, Dr. Paul recognizes the greater problem is the eroding value of US legal tender, one that isnt showing any signs of abating. You can read more details in Mineweb coverage of bullion and coin dealers calling for an investigation into the US coin blanks supply.

Absolutely and Honestly, No Idea Whats Going On There

Im sure there is a rumor of a high-profile stress test failure, but havent heard it yetdown as low as 1.2805 so farButt ugly and razor thin markets out there