Forwarded from Mish International:
well, boys and girls, Its not looking good for the home team.
central banks are buying the most gold hand over fist in decades.
Russian and China buying gold by the ton. literally. 800 tons for the Chinese in 2012, as example.
the Fed creating 85 billion a month in new monies. officially. the real number is unknown. or where the money is going. (ahem-euro banks). for example if you recall in 2008, officially, the Fed gave the banks 850 billion. later we find out the real number was closer to 8 trillion. some say 15 trillion. see here: http://abcnews.go.com/blogs/business/2011/11/fed-gave-banks-trillions-in-bailout-bloomberg-reports/
no major bankster has gone to jail for crimes that have bankrupted the nation. or for money laundering for "terrorists" or drug cartels. or for stealing money from allocated accounts. ahem.... MFglobal. I interpret this to mean that the banks are large and in charge, and will continue to do what is best for the banksters. regardless of the cost to the country.
the currency wars are now in progress..... see japan, for example. in its ongoing devaluation of the yen.
the monetary base in the US has grown exponentially over the last few years. only the lack of velocity of money has kept inflation from showing its ugly head.
unless you count the rise in the cost of food, energy, and medical care. but if you can survive on cheaper computers alone, then there is no inflation. (an let us not even discuss the manipulation of the CPI numbers.)
the Fed is locked into ever increasing money creation. the paper currency loses value in ever increasing percentages.
thus the fundamentals in favor of bullion have not changed to any degree that I can see.
in fact the case for precious metals as wealth storage without counterparty risk is stronger than ever.
thus this downside blow in the precious metals makes no sense in that light.
in the light that the west does not want a hyperbolic rise in the price of gold and......
the East wants to buy gold at the lowest price.....................then this price bombing makes perfect sense. (the Chinese jamming the market lower, no, say it aint so, joe)
however, as the great Lord Keynes once said, markets can remain irrational longer than you can remain solvent.
all that said, I would use this price bombing as an opportunity to buy more bullion.