12 hour december Gold chart... this is hillarious!

I'm sure, the only 2 explanations to this gold coming down in price is either a rip in the space time continuom, or agressive manipulation.

Why would they sell dollars immediately after the announcment of a takeover, then buy them...anyone like a 3rd option that actually makes sense?

1) When US announced takeover of Fannie and Freddie...there was a rush out of dollars...the simple answer is US prints more money = more inflation in the dollar.

2) After the initial shock wears off...the smarter investors begin to use their brain. Hmm...the deal will cause a massive amount of new money...but not right away. That is not an instant effect because they have not put a SINGLE DOLLAR into either GSE. This takeover will be inflationary, but not immediately inflationary.

The instant effect was...a real depreciation of the value of Fannie and Freddie stock, real and immediate. Investors realize this, and also know that many US banks hold this stock. This means, more bank losses, thus more write downs...and as I've said many times, a bank write down is destruction of virtual money...which decreases the amount of money in existance and thus increases the value of money.

Result to this? Dollar goes up, oil, gold, and silver go down.

It is not manipulation, these are people in the market using their brains.

Bank writedowns are deflationary to the currency...banks have destroyed hundreds of billions of currency, which makes every dollar left worth a little more.

I guess I must be a complete idiot...because I missed one of the fundamental laws of economics...gold must only go up in value, and any time the price of gold in decreasing, it must be government intervention.

ps...if they were really intended to interfere in the free market, why would they have to wait for the European markets to open? Surely, if "they" had enough money and power to make this happen, they could have some traders in Tokyo, don't you think?

silver is so worthless that you can't find any to buy. Bizarro economics.

Why vote for the lesser of two evils when you can go all in?
Satan for President in 2008

Stage two of the gold bull market

So have we reached the moment when gold bugs must start questioning their deepest assumptions. Have they bought too deeply into the "dollar-collapse/M3 monetary bubble" tale, ignoring all the other moving parts in the complex global system? Nobody wants to be left holding the bag all the way down to the bottom of the slide, long after the hedge funds have sold out. Well, my own view is that gold bugs should start looking very closely at something else: the implosion of Europe. (Japan is in recession too) http://tinyurl.com/4SIERRAHPBT

The Maastricht Treaty created the European System of Central Banks and the European Central Bank to head this system. The Treaty entrusted the European Central Bank with the responsibility for monetary policy, but it did not give this institution supervisory powers or an explicit mandate for providing emergency liquidity support to individual banks.

This explains why, at least temporarily, the dollar is rallying against the Euro. Once investors can see that neither of the two reserve currency titans (euro and dollar) is on a sound foundation, we will see a race to the bottom by the world's major currencies as each tries to devalue against other to protect exports.

This will signal the next gold bull rally. Once the ECB signals several rate cuts, gold will bounce like a rubber ball. In the mean time gold will continue to fall along with everything else (except the Yen and the Swissie) until market crash/correction is complete and painful enough for the ECB to start cutting rates.

As for timing, now that the FED has control of both Fannie and Freddie, look for an increased possibility of a slight discount rate hike before year's end to keep commodity prices in check. Now that the FED controls directly home mortgage rates, the commercial banks can dump their bad paper directly into FHA, and the discount window now has a drive thur using a third party; a 1/4 point rate increase will not hurt anyone. Any rate increase will be see by Wall Street as a continuation of the bear stock market and a good reason to hedge with gold. Ultimately, gold will surge, once it becomes clear that the euro lacks the staying power to serve as an alternative to the dollar.

wins.....

/Mike