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I think the banks will be ready for it. They shorted gold and with the "mysterious" plunge in gold they can now cover their shorts and rake in lots of profit.
Plus you can bet the Fed will have a window open just for them to borrow at low interest rates "just in case".
Perhaps even more notable is that on Friday, that "other" depository, Brink's, saw 24% of its entire registered gold holdings, or 133k ounces, quietly get withdrawn. This, together with the moves in JPM and HSBC inventory, meant that total Comex gold holdings dropped by 116K ounces to a new low not seen for the first time since 2006.
Someone more inquisitive than us may wonder: just where is all this gold being "withdrawn" to...
There is a disconnect between paper gold (GLD etf) and physical gold.
It's not one-for-one. There's more paper gold being traded then physical gold.
Over the past year countries have been repatriating their gold.
Germany asked the US for their gold back and the US has been tapdancing around that request.
Russia, India and China have dropped the dollar and are buying oil with gold from Iran.
There is something going on with the gold market (physical gold) but the articles are speculative at best as to who is taking the physical gold.
There is a disconnect between paper gold (GLD etf) and physical gold.
It's not one-for-one. There's more paper gold being traded then physical gold.
Over the past year countries have been repatriating their gold.
Germany asked the US for their gold back and the US has been tapdancing around that request.
Russia, India and China have dropped the dollar and are buying oil with gold from Iran.
There is something going on with the gold market (physical gold) but the articles are speculative at best as to who is taking the physical gold.
quote:
The U.S. stock market was plagued with glitches that happened on a daily basis, and not just in stocks. Markets for commodities, bonds, and currencies all had their fair share of computer-driven mishaps. Increasingly, investors were wondering not only if the market was rigged, but whether it was completely broken. Indeed, the trade publication Traders Magazine called 2012 “The Year of the Glitch.”
quote:
Wondering how the blow out in interest rates is impacting commercial banks, which just happen to have substantial duration exposure in the form of various Treasury and MBS securities, not to mention loans, structured products and of course, trillions in IR swap, derivatives and futures? Wonder no more: the Fed's weekly H.8 statement, and specifically the "Net unrealized gains (losses) on available-for-sale securities" of commercial banks in the US gives a glimpse into the pounding that banks are currently experiencing. In short: a bloodbath.
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