According to JPMorgan (who would know since as a primary dealer, they flip treasury take-downs to the Fed roughly 30 minutes after issuance for a handsome profit), the Federal Reserve is currently absorbing approximately 90% of new dollar-denominated fixed-income assets. 
Go back and re-read that last sentence.  That’s right, even the financial MSM is now admitting that the Fed is now nearly entirely monetizing the US deficit outright.
This is why QE4 will be announced next Wednesday (which has already been fully priced in thanks to multiple leaks from the Chicago Fed’s Evans as well as Bernanke last week) and why the Fed will ramp up outright purchases to $85 billion a month ($1.02 Trillion/yr) when operation Twist ends- there are simply no remaining buyers of US debt. 

Those who fail to see where this is headed may wish to acquire a copy of When Money Dies to grasp how the situation played out in Weimar Germany.

Submitted by Morris Hubbartt:

Many market pundits seem to have forgotten how strongly QE can affect the price of gold. This gold chart highlights those effects, with a broad green “chart brush”.   Note the thick green bars.  They highlight the gold price action during QE1 & QE2.  I believe QE3 (and possibly QE4) will produce very similar results.  When the Fed purchases bonds in the open market with printed money, gold tends to rally for a significant period of time.
Quantitative easing is positive for gold, and the effects on silver are even more powerful.  This chart highlights the enormous gains that silver achieved during both QE1 and QE2.   My focus is physical silver, because of concerns about the banking system and growing volatility.
My short term target is $44, which should be acquired at about the time that gold reaches $1850.  To put that in perspective, I expect silver to gain about 29%, while gold gains 7%.  That’s an outperformance ratio of about 4 to 1!

There is speculation in the markets that the US Federal Reserve will purchase more debt to help the US economy which is boosting gold bullion.
While speaking at Pace University in Manhattan , Federal Reserve Bank of New York President William C. Dudley said, “I will be assessing the employment and inflation outlook in order to determine whether we should continue Treasury purchases into 2013.” Dudley also stated, “The Fed will promote maximum employment and price stability to the greatest extent our tools permit, and we will stay the course.”

Fed officials are considering whether to step up record accommodation to counteract the scheduled expiration next month of Operation Twist, a program swapping short-term Treasuries with longer-term debt. A “number” of Fed officials said at the last policy meeting that they may need to expand its monthly purchases of bonds, according to the minutes of the FOMC ’s Oct. 23-24 meeting.
Gold has returned 10% this year and silver has returned 23% year to date, driven by quantitative easing.

By Stewart Thomson:

Fundamentally, I believe here are 4 major reasons that the long term silver chart looks “ultra-bullish.
First, the market is probably anticipating a substantial recovery in the Chinese economy, and perhaps additional government stimulus.
Second, the US fiscal cliff is likely to be resolved in a manner that encourages “risk on” institutional investors to take action on the buy-side.
Third, I expect the European Central Bank will announce measures that calm worries about not just Greece, but Spain and Italy, too.
Fourth, while the fiscal cliff will likely be resolved, I think the US Federal Reserve will expand the current level of stimulus being provided by QE3, probably in January, and this action could cause a near-vertical spike in all risk-on markets.

Silver is likely to be the greatest beneficiary of these 4 key events, even if they play out only partially.  If they play out as I’m predicting, I would expect silver to blast through the highs at $50, by early in the new year.  Silver at $80 is realistic, if these “fab four” events play out well.

The Pension Benefit Guaranty Corp (Federal agency that guarantees bankrupt pension funds) reported Friday that it ended it’s fiscal year with a $34 billion deficit, a 31% increase from the $26 billion deficit reported for the prior year.

QE to Infinity…AND BEYOND!!! will continue to grow exponentially as Social Security, Medicare, Medicaid, the Postal Service, FDIC, PBGC, and innumerable Federal spending programs are all bankrupt, and must either default or have their debts counterfeited away.
Which choice do you supposed Congress, the Treasury, and the Fed will choose?

In his latest update, Greg Mannarino discusses his outlook on crude oil, and why it is black gold.

Mannarino examines the terminal phase of the US dollar’s decline, which means that not only gold and silver, but oil will soon go super-nova priced in US dollars. 

Mannarino states that the middle class will not be able to cope with the rising cost of food and energy as the Fed’s QE policies continue throughout Bronco’s 2nd term, and the remainer of the middle class’ wealth is distributed to Wall Street.

The Bank of England Thursday prematurely halted it’s Quantitative Easing program at £375 billion, ending it’s QE3 early.  Governor King stated he has no plans for further bond purchases, and that the BOE will shift their focus to stimulating bank lending.

Apparently all of Europe including the UK will now allow Uncle Benny and the inkjets to perform their dastardly counterfeiting for them.

Does it really matter which bankster puppet is elected today?  In his latest update, Greg Mannarino discusses 4 major things the next US President cannot fix.
The first is the economy, which will continue to deteriorate regardless of today’s outcome.   The 2nd is US debt which will continue to accelerate to the upside as The Fed increases QE to oblivion.   The third is unemployment, which continues to deteriorate.  The 4th is the continued decline in salaries in real terms.

The legendary Jim Sinclair has sent an email alert to subscribers comparing this week’s terrible situation along the east coast in the wake of Sandy to the coming collapse of the US dollar.  Sinclair states that Ben Bernanke is the only person in US financial management that understands the current situation, and that QE∞ is the only thing delaying a complete systemic collapse.
Sinclair states that if Romney is elected and follows through on his threats to fire Bernanke, it would be the single greatest error made in US financial management ever”, and would result in gold trading above $3,500/oz and a complete US dollar collapse within 6-9 months!


Submitted by Deepcaster:

One Reason that the Increasing Inflation is not more obvious to the public is that the Official Statistics are Bogus and not just in the U.S., but in China and other countries as well.  The other is that the Velocity of Money is now extraordinarily low. Higher and increasing Monetary Velocities are associated with higher and increasing Inflation.

Only Operation Twist – in which The Fed sells short-dated Treasury securities and “Sterilizes” those funds by using the same funds to buy long-dated ones – is arguably non-inflationary because the proceeds do not circulate in the economy.  All the other Fed QE and Related Actions are Price Inflationary. But note well that The Fed has nearly run out of short dated securities to sell. Thus ongoing and all further QE will be Price InflationaryIn sum, the Money Printing will continue bringing Hyperinflation even closer. 


Markets in the US are due to remain closed for the second day running as a result of Hurricane Sandy. Monday’s trading saw gold futures volumes “far below normal”, one analyst said, with another adding the market remained “pretty quiet” on Tuesday morning.
The silver price climbed above $32 an ounce shortly after London opened, holding above that level for most of the morning, while other commodities were broadly flat.
The Bank of Japan meantime increased the size of its quantitative easing program Tuesday for the second time in as many months, from ¥80 trillion to ¥91 trillion.

In his latest update, Greg Mannarino discusses the massive rise in commodities prices, and states that when the debt bubble finally bursts, commodities prices will skyrocket.  Funds will pour from equities and bonds to the only safe havens remaining- commodities such as oil, gold, and silver

Mannarino states that equities will deflate while commodities, particularly food will rise exponentially higher as fiat currency dies.  Mannarino states that The Fed is in panic mode, and that Bernanke will begin QE4 before the end of the year.  The coming free market correction will be devastating and shocking to average Americans as COMMODITIES GO TO THE MOON!

Investors must protect themselves by becoming their own Central Bank, and acquiring physical gold, silver, and long-term food supplies. 

Full update below:

The legendary Jim Sinclair has sent the following email alert to subscribers this morning, in response to a reader inquiry as to why Sinclair believes the economy would immediately roll over into the Greatest Depression should the Fed stop QE suddenly.

Sinclair states that Like a drug the more you take, the more you need. The more money you create, the more money you must continue to create until it goes to infinity. You go cold turkey on money creation, you unleash the economic wrath of hell in the entire Western world. It all comes down in one great implosion.

His solution? Sinclair states that if he was the Fed Chairman, he would wean the system slowly down while working to recreate the monetary system with required total gold value for government treasuries tied to a world index of total Western World M3.

Sadly, Mr. Sinclair is not the Fed Chairman, rather we have a balding man who is the self-proclaimed greatest expert on the Great Depression, who seemingly has no comprehension on the consequences of monetary counterfeiting.
Full MUST READ alert below:

Submitted by Deepcaster:

It looks like the Fed decision last week to buy $40 billion a month in mortgage paper is the ultimate plan to clear the market once and for all of fraudulent mortgages, mortgage backed securities, and related derivatives. This means Fannie and Freddie will be bailed out and winding down through the back door. This means the big banks may be paid in full for your mortgage. It also means your pension fund assets will not be marked to market – at the price of debasing the purchasing power of your assets and benefits.

The Fed is now where mortgages go to die. …As this happens, trillions of dollars that have been amassed offshore will be free to come back into the US to buy up and reposition land, farmland, residential, and commercial real estate and other tangibles. With documents shredded, criminal liabilities extinguished, and financial institutions made whole, funds can return without fear of seizure.

The legendary Jim Sinclair sent an email alert to subscribers tonight advising readers that QE∞ cannot stop even temporarily or the dollar would collapse due to the economic implications. 

Sinclair states the current bullion bank generated corrections in the metals are nearing completions, and guarantees that gold will trade above $3,500/oz. 

  • Fed leaves QE3 at $40 billion in MBS purchases/month
  • Op-twist to continue through end of 2012- bringing total long-term treasury purchases to $85 b/month
  • ZIRP to continue through MID -2015
  • Surprisingly, silver popping on the no-news

Fulll FOMC statement below:

Our friend TF of has noticed an incredible correlation to the current desperate MOPE/SPIN capping of gold and silver in the wake of the QE3 announcement with the first months after QE2 was announced in November of 2010.   After the metals were aggressively capped for 2 months by the cartel after QE2, gold and silver went on a tear over the next 7 months, gaining 47% and 87% respectively.

TF believes a similar MASSIVE RALLY IN GOLD AND SILVER IS IMMINENT, likely taking gold to a minimum of $2,572 and silver above $60 by May of 2013.

Use the current MOPE capping of the metals as your gift to acquire gold and silver at massive discounts prior to their imminent explosion!

In his latest update, former Bear Stears trader Greg Mannarino states that QE3, in which the Fed is printing over 1,000 million dollars a day to purchase mortgage backed securities will soon be old news as the Fed will begin QE4-outright Treasury Bond purchases beginning in 2013.

Mannarino states that when Operation Twist ends at the end of 2012, the Federal Reserve will have NO CHOICE buy to institute a NEW ROUND OF TREASURY BOND PURCHASES!  The Fed has already stated they will keep mortgage rates low through the end of 2015, and they will achieve it by debasing and DESTROYING the dollar, and making OUTRIGHT TREASURY BOND PURCHASES in order to keep rates at low, artificially manipulated levels.  This will result in a downgrade in the US rating by all of the major US ratings firms.


With Friday afternoon’s sell-off, silver has now retraced it’s entire post QE∞ gains, retesting the gap in the chart on Bernanke’s QE∞ announcement.
While Bernanke, Blythe and friends are likely smugly congratulating themselves at their accomplishment, this is clearly unsustainable over the long term, and silver’s downside momentum and RSI indicators appear to be bottoming.

Fed Chairman Ben Bernanke gave a speech at the Economic Club of Indiana today titled: Five Questions about the Federal Reserve and Monetary Policy.  Bernanke addressed 5 questions focusing on the risk of the Fed’s policies increasing inflation and punishing savers.
In the you-simply-cannot-make-this-stuff-up department, Bernanke claimed that savers would benefit from QE∞ because ‘most savers are also homeowners‘, and that ‘many savers own businesses and stocks‘.

Fundamentally Bernanke is 100% correct- savers will benefit from QE3- provided they are saving in the form of REAL WEALTH such as land, food, and physical gold and silverThose saving in fiat federal reserve notes and receiving social security and pensions will be decimated.

Full text of Bernanke’s remarks and defense of QE3 below:

While we already posted the Chicago Fed President Charles Evans’ CNBC interview this morning in the gold and silver update, Evans’ comments are so shocking that they deserve their own post.

Evans explains the Fed’s dual mandate: keep unemployment low, and ensure inflation targets Wiemar Republic levels.
At least that’s what we heard.
Evans attempts to claim that the Fed is ‘justified’ in attempting to debase the dollar to sub-worthlessness, due to the high unemployment rate.

Evans claims that the only possibility inflation will increase above 2-3% is if the economy recovers, and people bid up asset prices due to the roaring economy.  Until that occurs, Evans states the Fed will continue create new accommodative policies to ‘stimulate growth’.
Folks, Evans has just unknowingly given THE PRECISE FORMULA FOR HYPERINFLATION!!  Back up the truck on all significant dips in gold and silver as it is now time to CONVERT ALL FIAT ASSETS INTO PHYSICAL GOLD AND SILVER!!!


In his latest update, Greg Mannarino discusses Fed Presidents Charles Evans and John Williams’ speeches this week calling for FURTHER quantitative easing. 

Williams stated the Fed can extend Operation Twist into infinity (which can only occur if the Fed goes out and PURCHASES T-BONDS DIRECTLY!!).   Mannarino states we are in the middle of an escalating GLOBAL CURRENCY WAR.  The petro-dollar is being threatened as China is colluding with the Saudi’s to bring the largest oil refinery in the history of the world in 2013.

By artificially suppressing interest rates, The Fed is causing massive inflation which will BLINDSIDE Americans.  Mannarino states we are in the CALM BEFORE THE STORM, and Americans’ cost of living is going to SKYROCKET!!  He claims massive civil unrest here in the US is imminent!!

Once the Federal Reserve becomes the lender of last resort, it’s OVER!