It’s here, after the Fed’s decision to leave Interest Rates unchanged and to buy $300 billion in Treasuries, plus another $750 billion minimum in buying mortgage backed securities; the markets woke up this morning to the realization Inflation is coming back. Gold which closed down $29 yesterday but immediately shot up after the announcement on spot pricing. Today the market has caught up and as I speak Gold is up $66.90 at $956 oz. I hope you have been listening to this blog and have gotten in. If you were on the sidelines- this is the time to still get in as $1050 first target. After that $1250 oz so get in while you can. We have Lift-Off! – Good Investing- jschulmansr

“Nothing will unnerve the paper gold shorts more quickly and do more to undercut their confidence than to strip them of the real metal and force them to come up with more hard gold bullion to make good on deliveries. “Stand and Deliver or Go Home” should be the rallying cry of the gold longs to the paper gold shorts.” –Trader Dan Norcini

========================================================

Claim a gram of FREE GOLD today, plus a special 18-page PDF report; Exposed! Five Myths of the Gold Market and find out:

·        Who’s been driving this record bull-run in gold?

·        What Happens When Inflation Kicks In?

·        Why most investors are WRONG about gold…

·        When and How to buy gold — at low cost with no hassle!

Get this in-depth report now, plus a gram of free gold, at BullionVault

=========================================================

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Where is the Dollar heading? Part 1 — A Must See!

=========================================================

 Gold rallies over 7% as Fed move fuels inflation fears

By Moming Zhou, MarketWatch Last update: 1:14 p.m. EDT March 19, 2009

NEW YORK (MarketWatch) -- Gold futures climbed to top $950 an ounce after 
the Federal Reserve pledged to purchase as much as $1.15 trillion in U.S. bonds 
and mortgage-backed securities to encourage lending, sparking worries of inflation 
ahead. "Looking ahead, we fear inflation. It may be that Dr. Bernankenstein has 
created a monster beyond his control," Michael Farr, president of Farr, Miller & 
Washington, said of Fed Chairman Ben Bernanke. 

The U.S. dollar's losses in the wake of the Fed's move also lifted gold prices, 
with investors buying gold as a hedge against inflation and a weaker dollar. 

Gold for April delivery surged $66.5, or 7.6%, to $955.6 an ounce on the 
Comex division of the New York Mercantile Exchange. It climbed to $963.5 
earlier in the session, the highest level in nearly one month. Gold's gain came 
after it lost $27.70 to end at $889.10 Wednesday, the lowest closing level 
in two months. 

Wednesday's floor trading ended before the Fed announced its decision. 
George Gero, a precious metals trader for RBC Capital Markets, called gold's 
quick reverse from an nearly $30 dollars to up more than $60 "shock and awe." 
The Fed's plan "could change [the] inflation outlook and result in a greater 
trading range," he added. 

Silver prices marked an even bigger rally. Silver for May delivery jumped 
12.7% to $13.445 an ounce. 

'Gold is well-placed to re-challenge $1,000 an ounce.'
— -- James Moore, TheBullionDesk.com

The Fed said it would buy longer-term Treasury bonds to help arrest a 
deepening slide in the U.S. economy, a surprise move that also sent stocks 
soaring and triggered violent moves in other markets. 

The Fed's move, one of several actions taken Wednesday aimed at making 
it less expensive to borrow money, doubled the amount of money the central 
bank has poured into the economy to try to stimulate economic activity. 
Read: The Fed Minutes. 

"The Fed's announcement of further quantitative easing triggered renewed 
inflation fears," wrote James Moore, a precious metals analyst at 
TheBullionDesk.com. "Gold is well-placed to re-challenge $1000 an ounce." 

Holdings in SPDR Gold Shares (GLD94.15, +1.06, +1.1%) jumped to 
1,084.33 tons Wednesday, up 15.28 tons from a day ago, according to 
the latest data from the fund. The total is nearly 80 tons higher than 
a month ago. 

In economic news Thursday, the number of people collecting 
state unemployment benefits jumped by 185,000 to a record seasonally-
adjusted 5.47 million in the week ending March 7, while new claims dipped 
by 12,000 to 646,000 in the week ending March 14, the Labor Department 
reported Thursday. See Economic Report on weekly jobless claims. 

On Wall Street, stocks meandered between gains and losses following 
Wednesday's rally. Asian and European stocks also moved higher. In energy 
trading, crude jumped more than 7% to about $52 a barrel. 

 

Moming Zhou is a MarketWatch reporter based in New York.
 
 


========================================================
 
Gold, T-Bonds, and Russia's Tu-160 Bombers -Seeking Alpha





A torrid tale of politics, gossip and a shiny, yellow threat to world peace...

Germany in 1944 could buy materials during the war only with gold. 
Fiat money in extremis is accepted by nobody...

- Alan Greenspan, then-Fed chairman, May 1999


FOR A WORLD-LEADING MARKET turning over $60 billion per day, 
London's wholesale gold dealers sure spook easy sometimes.


"I've just heard central banks have been selling. You hear anything?" 
asked one breathless contact of BullionVault on Wednesday... just 
before the Federal Reserve's $1.25 trillion shot in the arm gamed 
the gold price so hard, so fast, the conspiracy theorists at GATA 
should demand a Congressional hearing into Ben Bernanke's 
long Comex position.
 
More often than not, however, professional dealers get all 
aflutter about rumors of central-bank buying, not selling. In 
late 2008, it was supposed to be the Saudis. Last month it was 
the Russians – or so gossip claimed. Gossip that the Kremlin 
was only too happy to buoy.
 
Come mid-March, the People's Bank of China (PBoC) fired up 
the tittle-tattle – and again, as if on purpose – by forecasting 
that despite "safe haven" demand for the US dollar in 2009, 
gold prices would "fluctuate at high levels...possibly 
breaking through previous highs..."
 
Now this week a report by the oh-so-sexily-named 
Central Banking Publications says that out of 39 reserve 
managers controlling $3.2 trillion in official currency and 
bullion hoards – some 42% of the world total – well over 
one-in-two feels Buying Gold would make a smarter move 
today than it did this time last year.
 
So are the emerging powers hoarding gold today or not? 
What's a private citizen trying to look after his or her own 
to make of this chatter?
 
Well, as a rule, it means little or nothing for the price of gold 
day-to-day. And like GATA's claims – 
highly detailed, much derided – that Western governments 
regularly fix the gold market to cap its ascent, rumors of 
central-bank buying never prove quite as dramatic as 
central-bank action to either defend or debase the 
currencies against which it's priced instead.
 
Raise overnight interest rates to double digits, for instance 
as the Federal Reserve's Paul Volcker did in the early 1980s 
and non-yielding gold will tumble against high-yielding cash. 
 
Cut and hold rates at zero, in contrast...while creating, say, 
$1 trillion of fresh money in a 425-word statement, as Ben 
Bernanke did Wednesday...and you'll send Gold Prices higher, 
just as surely as the Maestro's apprentice strolling into London 
and buying 50 tonnes on his own account.
 
Investment-house analysts, meantime, are more focused on 
the possible 400-tonne sale mooted to help save the world-
saving International Monetary Fund (IMF). Yet the really big 
driver so far this year remains mutual-fund managers buying 
paper-shares in ETF trusts. Western coin buyers paying 
10% mark-ups (or more...!) are meantime wrestling with Asian 
scrap-jewelry sellers as to who can tip the balance of apparent 
supply and demand.
 
Large-scale gold purchases by Beijing or the Kremlin would 
anyway come at the pit-head, rather than on the open market, 
as they look to "slow and steady accumulation" in the words 
of UBS's highly-regarded John Reade recently, quoted by the 
Financial Times. 
 
Buying gold direct from domestic miners was 
how South Africa more than doubled its official reserves in the 
late 1960s. China and Russia now stand first and fourth among 
the world's gold-producing nations. Why announce their 
intentions, sticking a premium onto their dealer's offer, 
by going through the open market?
 
But behind the dealing-room noise, however, the cold facts 
of Asian, Middle East and Russian gold hoarding point to a 
deeper trend – an ugly if grand historical shift that finds its 
last cyclical turn almost 10 years ago to the day.
 
In mid-1999, the Swiss, European and UK central banks 
announced gold sales that did indeed shake the market. 
Back then, the Gold Price had been tumbling for the best 
part of two decades – thanks first to those double-digit US 
rates, and then to the fast-growing number of high-return 
alternatives for investment cash that sprouted worldwide 
as interest rates began to fall back but remained well north 
of the rate of inflation.
 
Prompted by investment-bank advisors and analysts, the 
late 20th century's heavy selling by West European 
governments coincided not only with both a multi-year 
low in the gold price and a bubble in earnings-free tech stocks. 
 
It also came together with Francis Fukuyama's "end of history" 
and Tony Blair – the UK prime minister then guilty of bombing 
neither Belgrade nor Baghdad – declaring his to be "the first 
generation [in Europe] that may live our entire lives without 
going to war or sending our children to war."
 
Put Blair's cant to one side (if you're not retching). Why did 
Europe's central banks have so much gold to sell in the first 
place? As BullionVault has noted before, the continent's 30-
year scrap between its big nation states was preceded and 
worsened by frantic gold hoarding amongst the major players. 
 
Because a government must trust in another's long-term survival 
when accepting its paper as payment. Whereas gold bullion, as 
former Fed chief Alan Greenspan famously said – and just before 
the UK announced its 415-tonne sales back in May 1999 as it 
happens – "still represents the ultimate form of payment in 
the world.
 
"Germany in 1944 could buy materials during the war only with 
gold. Fiat money in extremis is accepted by nobody. Gold is 
always accepted."
 
Why else did the Nazis march straight to seizing the central-bank 
vaults on reaching Vienna, Prague and Warsaw? Why else did the 
United States grow its hoard from 500 tonnes in 1900 to almost 
20,000 by the eve of World War Two...nationalizing privately-held 
gold on pain of a $10,000 fine or imprisonment when F.D.R. took 
office at the depths of the Great Depression? (See 
Hoarding for War, Vaulting for Victory for more...)
 
Now, two generations later, China's official gold reserves remain 
unknown and unknowable to outside observers. But it has become 
the world's No.1 gold-mining state thanks to the collapse in South 
African output. And the fresh deluge of US money debasement only 
confirms why Beijing's bankers "hate you guys" as one policy-maker, 
Luo Ping – director-general of 
China's Banking Regulatory Commission – put it last month.
 
"Once you start issuing $1 trillion or $2 trillion," he said to the 
Financial Times, five weeks before the Fed issued...ummm...$1.25 
trillion of new cash..."we know the Dollar is going to depreciate.
 
"So we hate you guys but there is nothing much we can do. Except for 
US Treasuries, what can you hold? Gold? You don't hold Japanese 
government bonds or UK bonds. US Treasuries are the safe haven. 
For everyone, including China, it is the only option."
 
Further west (but only a little, politically), Russia's official gold reserves 
have swelled by one-half this decade on the IMF's data, with new 
purchases peaking in August 2008 – just as the 58th army rolled into 
Georgia to defend South Ossetia's illegal, breakaway republic.
 
Under Vladimir Putin, the Kremlin said it wanted gold to grow from 
2.5% to fully one-tenth of its foreign currency reserves, meaning 
four-fold growth of its bullion hoard if not a collapse in its paper a
ssets. Just last month, the central bank stated that it was Buying Gold. 
On the available data, it had already added 109 tonnes to its hoard in the 
15 months starting Jan. 2007 at a cost of some $27 billion.
 
Oh sure, that's peanuts compared to the total $4 trillion-worth of gold 
now thought to be above-ground at today's prevailing prices. But the 
vast bulk of that gold is held as jewelry, not monetary units like coins 
or bars. And according to Tsar Putin himself back in 2007, before this 
burst of gold-hoarding really got started, the ratio of 
Russian government debt to its national gold reserves was already 
stronger than for any other state in Europe.
 
Never mind how wide of the mark that metric was; Putin's claim shows 
how much Gold Bullion matters to Russia's political confidence – a 
swagger only called into use when debt and foreign currencies slide 
into crisis. And then this week, the current Kremlin incumbent, Dmitry 
Medvedev, goes and announces that he's "rearming" Russia, using the 
very word – "rearmament" – that Europe fretted over and feared all 
through its short 20-year peace between the first and second world wars.
 
Specifically, "[I will] increase the combat readiness of our forces, first 
of all our strategic nuclear forces," Medvedev declared Tuesday, piling 
historical weight onto Monday's more Cold-War-style news that 
Roscosmos, the Russian space agency, is planning a manned lunar 
mission for 2015.
 
Oh, and then there was Sunday's news from Venezuelan socialist 
crackpot Hugo Chavez that Russia's long-range Tu-160 "Black Jack" 
bombers – each capable of carrying 12 nuclear warheads – are welcome 
to use the Caribbean island of La Orchila. You know, just for re-fuelling, 
cleaning the windscreen, emptying the ash-trays...but not ever as a 
permanent base.
 
So this isn't the Cuban missile crisis. Not yet at least. But the Kremlin's 
new saber rattling must still have caused a shock at the White House – 
just as it shocked anyone not tracking Russia's fast-growing gold reserves. 
Either that, or Team Obama is so smart, they were expecting some kind of 
pre-emptive strike ahead of the Fed's nuclear blast in the T-bond market.
 
"Foreign demand for long-term Treasuries has disappeared over the last 
few months," writes Brad Setser – an ex-US Treasury and IMF official, 
former economist for Nouriel Roubini's doom-and-gloom funsters at RGE 
Monitor, and a visiting or associate fellow pretty much everywhere worth 
having deep thoughts on big subjects. Studying the latest official data 
(released Monday) in his blog for the Council for Foreign Relations, "It is 
striking that for all the talk of safe haven flows to the US, foreign demand 
for all long-term US bonds has effectively disappeared," he explains. 
 
In particular, "Over the past three months, almost all the growth in 
China's Treasury portfolio has come from its rapidly growing holdings of 
short-term bills, not from purchases of longer-term notes...and it is also 
still selling [mortgage] Agency bonds."
 
All told, China continued to buy US Treasury debt; it is "the only 
option" for China, Russia and everyone else at this stage of the game, 
as Luo Ping wailed  to the FT last month. But of the $12.2 billion China 
purchased in January, fully 95% were short-term bills. "Russia also, 
interestingly, added to its holdings of short-term Treasury bills," Setser 
says.
 
And then, with the latest Treasury fund-flow data revealed...BOOM! 
The Federal Reserve explodes the Dollar by printing $300bn to buy 
30-year US debt, plus another $750bn to buy mortgage-agency bonds.
Someone's got to buy this stuff, and the forced buyers of this decade-
to-date are starting to tire. They might just be looking to Buy Gold for 
much more than "portfolio diversification" as well.
 
There. How's that for a gold-market rumor...?


========================================================

Claim a gram of FREE GOLD today, plus a special 18-page PDF report; 

Exposed! Five Myths of the Gold Market and find out:

·        Who's been driving this record bull-run in gold?

·        What Happens When Inflation Kicks In?

·        Why most investors are WRONG about gold… 

·        When and How to buy gold — at low cost with no hassle!

Get this in-depth report now, plus a gram of free gold, at BullionVault 

========================================================

Where is the Dollar heading? Part 1 - A Must See!

========================================================

 

My Note:  Rumors or not Gold is up $69.70 On the Day! - 
Good Investing - Jschulmansr

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========================================================

Nothing in today's post should be considered as an offer to buy or sell any securities or other 
investments; it is presented for informational purposes only. As a good investor, consult your 
Investment Advisor/s, Do Your Due Diligence, Read All Prospectus/s and related information 
carefully before you make any investing decisions and/or investments. –  jschulmansr







 
 

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