WARNING: The Process of QE-Driven Bubble Bursting Has Began
Global Derivatives Market Has Already Suffered A Staggering $300 Trillion of Losses, Fed Lost $151 Billion in Bond Values, Gold Drops Below $1,200, Smart Money Is Heading For The Exits!!!
Jim Rogers: “This Is Too Insane–And I’m Afraid We’re All Going To Suffer For The Rest Of This Decade”
When asked about the explosive riots occurring in Brazil, Jim warned to prepare for much more, in that, “This is the first time in history where you’ve had all the central banks in the world printing money at the same time. Europe, Japan, America, and the UK, all, are frantically trying to debase their currencies…I’m afraid that in the end, we’re all going to suffer perhaps, worse then we ever have, with inflation, currency turmoil, and higher interest rates. As I say, this has never happened before, it’s never been a good policy in the long run, so I’m afraid we’re all going to suffer for the rest of this decade from this crazy, crazy money printing.”
$300 Trillion In Derivatives Losses To Lead Gold’s Rebound
Today Egon von Greyerz warned King World News that the global derivatives market has already suffered a staggering $300 trillion of losses. These massive derivatives losses, which are being hidden from the public, will help lead the rebound in gold as it begins the next of its bull market. Below is what Greyerz, who is founder of Matterhorn Asset Management out of Switzerland, had to say in this powerful interview.
Greyerz: “A few years ago when the problems in Greece started, it was found that the Goldman Sachs had helped them to hide the real truth of their economy by a major derivatives positions.
Now we’ve found out that Italy has done exactly the same thing. They took out derivatives in order to meet euro criteria back in the late 1990s. They had a total of $31 billion of derivatives and now they are finding that at least $8 billion of that is worthless. That’s about 30% of the entire position….
Smart Money has been heading for the exits.
Paulson: Why Is the Fed the Only Game in Town?
…The markets have experienced a broad selloff since Fed Chairman Ben Bernanketold Congress last week the central bank could reduce its $85 billion in monthly purchases of Treasurys and agency mortgages this year. But to Paulson, it seems the selloff came as no surprise.
“When you have a big, ugly problem, there’s never going to be a neat, elegant solution that is totally painless or without a cost and to me it’s just completely unrealistic to assume that those programs could be phased out without some market volatility and some pain,” Paulson told CNBC’s Maria Bartiromo on “Closing Bell.” “Market participants, some of them, are addicted to these abnormally low interest rates.”
Gold extends rout, drops below $1,200 an ounce
….And the pressure didn’t let up in electronic trade, with the contract dipping as low as $1,196.10 before changing hands in recent action at $1,201.10. Gold hadn’t traded below $1,200 an ounce since August 2010, according to FactSet.
Gold might continue to fall as real interest rates — the return on bonds minus inflation — continue to rise.
“Already our measure of global real interest rates…was rising [in] early April, with this having shown a strong negative correlation with gold over the longer term,” said Simon Smith, chief economist at FxPro in London.
BofA: ‘GOLD BEARS BEWARE’
If you’ve been betting on gold this year, watching it fall day after day – including a few spectacular crashes, like the one we’ve seen over the past few trading sessions – has probably not been fun.
As the daily candlestick chart at right shows, the shiny yellow metal hasn’t spent many days in the green.
Today, the price of an ounce of gold dropped below $1200 for the first time since August 2010, hitting a low of $1196.10 this afternoon before bouncing back to current levels just above $1200.
BofA Merrill Lynch technical strategist MacNeil Curry argues today in a note to clients that “further gold downside [is] limited.”
Fed Has Lost $151 Billion in Bond Values
The Federal Reserve has lost at least $151 billion over the last seven weeks due to falling values of its $3.3 trillion bond portfolio, Fortune estimates.
And that could end up costing taxpayers.
Because estimating the value of the Fed’s bond portfolio is tricky, its $151 billion figure could be off, Fortune admits.
BOND MARKET LIQUIDATION: Bond Funds Hit With Biggest Outflows Ever This Week
BofAML Global Research, EPFR Global
Apparently this was the week where the rush for the exits in the bond market really hit a crescendo.
In the week ended June 26, investors pulled a record $23.3 billion from bond funds. And it was a record across every type of fund: emerging markets, high yield, investment grade, and mortgage-backed securities funds all saw their largest weekly outflows ever.
Bond funds shrank by 0.9% this week, marking the second-largest weekly loss on record in terms of assets under management.
Deutsche Bank’s LaVorgna: Fed May Hike Rates Sooner Than You Expect
The Federal Reserve may hike rates sooner than you think. In fact, Joe LaVorgna, chief U.S. economist at Deutsche Bank, predicts the central bank will start increasing rates as soon as next summer.
Next Major Crash Is Here – Gold Is The Major Indicator – MAJOR PLAYER ABOUT TO FALL – Cities Can’t Sell Their Muni Bonds – The World Is Suddenly On Brink of Severe Cash Crunch
Fed’s Jeremy Stein Full Speech In Which A “Hypothetical” September Taper Is Announced
Submitted by Tyler Durden on 06/28/2013 – 08:10
The first of three Fed speeches is out, and as expected, it contains nothing new save for the ongoing barage of stock market battering for daring to sell on last week’s Bernanke warnings that the Fed’s monthly flow is set to begin tapering in September. It continues to be as if the Fed is shocked to learn that nothing else matters in this “economy” and, of course, “market” than what the Fed will do and say.