Does the gold collapse on april 12 prove Bernanke was right?

[ShootSpeeders]

I've read a couple articles today (april 14) saying that. The argument is that Bernanke has saved the economy from both collapse and inflation and better times are ahead and thus people are abandoning gold. I think it's just the opposite. Ben is scared too death the dollar will crash soon and that's why he told the banks to attack gold. The gold collapse last week was pure manipulation.

 

[Mr. H.]

Folks are also bailing on crude contracts.

 

[Mad Scientist]

Throughout History ALL Fiat Currencies, which is what the USD is, have failed.

Many countries are making deals to use their own currency for trade and get away from the USD, it's just a matter of time before it crashes.

Plus, there's more proof of Gold and Silver price manipulation than people want to admit.

 

[TheOldSchool]

Imaginary values and prices collapsed???????

And it affected nobody??????????

Everyone panic!

 

[boedicca]

Gold Collapsed? As if.

Cyprus and Greece are selling of gold to pay off debt. And gold speculators are moving capital into equities instead. Gold will go back up given that QE^Infinity is still the playbook.

 

[Staidhup]

Bernanke has accomplished but three things, devaluation of the currency, exposure of future generations to unprecedented debt, and eventual inflationary environment. He has demeaned the independence of the Federal reserve and in the process manipulated interest rates to the point that savings are now earning less then the rate of inflation. The flight from gold to the stock market is a question of confidence and rate of return. Gold is a hedge and safety net when faith in ones currency is in question. The flight from the Euro and Dollar to the market, has for the moment, driven the price of gold down and driven the market to record highs. One can only expect that as earnings growth continue to increase at 1%, consumer confidence to remain tepid, and unemployment to remain high, then its logical to conclude the bull market will experience a correction in the not so distant future and gold recover.

 

[ShootSpeeders]

Cyprus and Greece are selling of gold to pay off debt. And gold speculators are moving capital into equities instead. .

That's what we're told but i don't buy it. Cyprus and greece selling gold means the euro is tanking and we are closer to a gold standard. That's the view from the other side.

As for equities, the economy is still super-weak and the govt is propping up stocks. You do know about the PPT don't you?

 

[editec]

ALL currency is fiat.

Some is just way more FIAT than others.

I suspect that our government is expanding the amount of money in circulation way too fast given the REAL growth of this economy.

 

[oldfart]

Of course the obvious explanation that gold is a commodity bubble and that the inflationista argument is being proven wrong for the umpteenth time in the last decade does not occur to anyone. Keep it up folks. Buy into the conspiracy theory. Buy gold. It will transfer wealth from you to people who are closer attuned to reality.

 

[CrusaderFrank]

China wants to have a big gold buying spree so they made Bernanke throw gold into a brief tailspin

 

[Toro]

We've been discussing this for a while. Gold has been in a very pronounced downtrend for many months now whereas stocks have been rising. This suggests that Bernanke's plan is working, because stocks rising and gold falling is what one would expect if people are less worried about inflation, less fearful and more confident about the economy.

It might be a headfake though. Only time will tell.

 

[tjvh]

Repeat after me... When stocks go down gold goes up, when stocks go up gold goes down.

 

[EdwardBaiamonte]

We've been discussing this for a while. Gold has been in a very pronounced downtrend for many months now whereas stocks have been rising. This suggests that Bernanke's plan is working, because stocks rising and gold falling is what one would expect if people are less worried about inflation, less fearful and more confident about the economy.

It might be a headfake though. Only time will tell.

yes, by time Bernanke stops printing money the Balance Sheet will have 4-5 trillion on it. Thats almost half of GDP to pull out of economy to avoid severe inflation. It seems impossible.

 

[waltky]

Granny says, "Dat's right - the sky is fallin'...

Gold price declines to two-year low
15 April 2013 - Gold has fallen to its lowest level in two years, while wider commodity prices have also declined following disappointing Chinese economic data.

The price of the precious metal was down 9.2% to $1,395 an ounce. Meanwhile, oil prices fell to four-month lows, with Brent crude down $2.29 to $100.75 a barrel, and the main US share index, the Dow Jones, ended down 1.8%. This was the Dow's biggest fall since November. Analysts said that the explosions at the Boston Marathon also contributed to the fall in share prices. The price of copper and aluminium were also sharply lower. Copper fell to its lowest level in a year and a half at $7,085 a tonne, and aluminium sank to a three-and-a-half year low.

'Powerful driver'

Analysts said a key factor in gold's fall was the expectation that the US central bank, the Federal Reserve, will tighten monetary policy by stopping its quantitative easing (QE) programme. This means that the rate of US inflation is likely to fall, meaning investors have less reason to hold gold to avoid a corresponding decline in the value of cash investments. Cyprus's announcement last week that it was planning to sell most of its gold reserves has also had an impact on the fall in the price of gold. Some analysts fear that other weak eurozone economies, such as Italy and Spain, will follow Cyprus's lead and sell some of their gold stocks, adding further supply to weakening demand.

Dominic Schnider, an analyst at UBS Wealth Management, said it might not have been the eurozone that triggered the mass flight out of gold: "What we now see is panic selling, perhaps triggered by the Fed's stimulus view. The Fed has given the signal that there's a possibility to reduce QE and that took a lot of trust out of gold. "And people recognise that an environment where you have no inflation is a powerful driver to get out of the metal." The wider commodity and share declines follow after China said overnight that its economy expanded by 7.7% in the first quarter of 2013, lower than forecasts and below the pace of growth of recent years.

'Bleak'

 

[asterism]

ALL currency is fiat.

Some is just way more FIAT than others.

I suspect that our government is expanding the amount of money in circulation way too fast given the REAL growth of this economy.

That's very true. ALL currency is fiat

 

[EdwardBaiamonte]

ALL currency is fiat.

Some is just way more FIAT than others.

I suspect that our government is expanding the amount of money in circulation way too fast given the REAL growth of this economy.

dear, Bernanke's expansion of money supply is not related to the real growth of the economy nor has anyone one on earth ever said it was, especially since the economy is not growing!!!!!!!
You may be the only person on earth not to know that!! Why not take econ 101 so you can be intelligent rather than pretending all the time to be intelligent!!

 

[iamwhatiseem]

We've been discussing this for a while. Gold has been in a very pronounced downtrend for many months now whereas stocks have been rising. This suggests that Bernanke's plan is working, because stocks rising and gold falling is what one would expect if people are less worried about inflation, less fearful and more confident about the economy.

It might be a headfake though. Only time will tell.

Bernanke's plan...you mean the one that leverages the future to prop up the current? The one that calls for indefinite money printing and bond/toxic asset buying with our money?
I wouldn't call that a plan....I would call it a ruse.

 

[Toro]

We've been discussing this for a while. Gold has been in a very pronounced downtrend for many months now whereas stocks have been rising. This suggests that Bernanke's plan is working, because stocks rising and gold falling is what one would expect if people are less worried about inflation, less fearful and more confident about the economy.

It might be a headfake though. Only time will tell.

Bernanke's plan...you mean the one that leverages the future to prop up the current? The one that calls for indefinite money printing and bond/toxic asset buying with our money?
I wouldn't call that a plan....I would call it a ruse.

Maybe.

But the gold and stock markets are telling you otherwise.

 

[KissMy]

Gold is losing it's luster because sanity is returning to government spending.

 

[iamwhatiseem]

We've been discussing this for a while. Gold has been in a very pronounced downtrend for many months now whereas stocks have been rising. This suggests that Bernanke's plan is working, because stocks rising and gold falling is what one would expect if people are less worried about inflation, less fearful and more confident about the economy.

It might be a headfake though. Only time will tell.

Bernanke's plan...you mean the one that leverages the future to prop up the current? The one that calls for indefinite money printing and bond/toxic asset buying with our money?
I wouldn't call that a plan....I would call it a ruse.

Maybe.

But the gold and stock markets are telling you otherwise.

Which is only reacting to the ruse and not what it would be without the $85 bn a month infusion. Sorry, but over $1 trillion a year in market propping is not good use of taxpayer funds. Just to maintain the illusion.