The FED's Policy is Inefficient, Destruction of Paper Money and Gold, China Is Accumulating Gold To Back The Yuan

Philippe Herlin : The Fed's Policy is Contradictory and Inefficient
Published Dec 20, 2012 on Goldbroker

The Fed has decided, last week, to extend its quantitative easing (QE) policy. After « Operation Twist », which consisted in selling short-term bonds in order to buy long-term bonds, and thus drive the latter down rate-wise, the US central bank is back with pure monetary creation, and to quite an extent : up to $85B a month, i.e. $45B of Treasury bonds and $40B of mortgage-backed securities (MBS). The goal, clearly, is to help the State finance its abyssal deficit and to help a banking sector still knee-deep in the housing crisis. At the same time, the Fed has restated that the base interest rate would remain at the lowest possible.

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Destruction of paper money will lead to higher prices in the precious metals
Published Dec 19, 2012 on Goldbroker

More QE and gold goes down. In addition, another downpour of economic news that confirms the total inability of central banks and governments to provide any credible solution to what is a guaranteed road to perdition.

With this desperate economic situation, most people expected a different reaction to the Fed’s money printing announcement on 12.12.12. But we should have learnt by now that markets always do what they should do but not when we expect them to. Gold and silver went up on the Fed announcement but sold off afterwards and continued to be under pressure. Let us just remember that all we are seeing are little wiggles in a major secular bull market in the metals.

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The 12 Gold Bugs of Christmas | Casey Research
Published Dec 17, 2012 on Caseyresearch

While the price of gold has languished in a trading range much of the year, leaving some investors scratching their heads, many have been buying – and in some cases, really loading up.

It's a tad puzzling that gold hasn't broken into new highs, despite enough catalysts to move a herd of stubborn mules. But that's the hand we're dealt right now. We can't get up from the table until the game reaches its conclusion. Besides, I think the stall in prices is giving us one last window to buy before prices break permanently into higher levels for this cycle.

At least that's how a number of prominent investors and institutions are viewing the price action right now. Here's a sampling of this year's "gold bugs" and what they've been doing about precious metals recently.

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Diplomat Admits China Is Accumulating Gold To Back The Yuan
Published Dec 19, 2012 on Kingworldnews

Acclaimed money manager Stephen Leeb stunned King World News when he said he was recently speaking with a Chinese diplomat and the diplomat accidently admitted to him that China was accumulating gold specifically to back the yuan. This was a shocking admission and the diplomat then attempted to backtrack but it was too late.

But first, here is what Leeb had to say about what is happening in the gold war: “The Federal Reserve here in the US recently announced they are willing to print over $1 trillion worth of paper in the next 12 months. We can print as much money as we want but it’s not going to do any good.”

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GATA's Bill Murphy & Chris Powell call out Gold and Silver Market Manipulation Conspiracy Critics
Published Dec 18, 2012 on YouTube

Several Japanese pension funds started to invest in gold for the first time, according to the Wall Street Journal. The report claims the funds are looking to mitigate the damage of market shocks and reduce the risks associated with currencies. Until recently the pension funds invested mostly in domestic stocks and bonds. Bill Murphy and Chris Powell from the Gold Anti-Trust Action Committee talk about the role of gold as a hedge in world markets.

And they discuss the role of the price mechanism and price discovery and on this show, as well as the role central banks, and private banks, play in distorting it.

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Brazil Doubles Gold Reserves as Central Banks Buy Bullion
Published Dec 21, 2012 on Bloomberg

Brazil boosted gold reserves for a third month in November to double the country’s holdings since August as central banks from Russia to Belarus and South Korea add the metal to diversify their assets.

Brazilian holdings expanded 14.7 metric tons in November to 67.2 tons, the most since November 2000, according to data on the International Monetary Fund’s website.

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