EurAnalysis

German Factory Orders m/m fall by -3.3% vs -0.3% expected vs -1.3% prior

If US falls off the fiscal cliff somewhere down the road then wouldn't that send the USD down into the abyss? I understand USD benefits from chaos / catastrophic events but I would think that a fiscal cliff problem would crush the dollar as it is USD negative right?

I know this won't happen immediately, they will kick the can down the road regardless of who wins but just curious to hear your thoughts.

http://kingworldnews.com/kingworldne..._To_Occur.html

Snippet:

Today James Turk spoke with King World News about the Fed purposely allowing a Lehman-type blowup to occur, the stunning news about what is taking place with the Fed’s balance sheet, Friday’s gold and silver smash, as well as what to expect going forward.



Here is what Turk had to say: “When we get days like Friday with big price drops in the precious metals, Eric, two things come to mind. First, there have been a lot of similar smashes in precious metal prices over the past decade, particularly on a Friday. Why on Fridays?”

Friday is also another good example of how the shorts and central planners have been killing the black-box short-term trend followers who mindlessly do whatever their mathematical models tell them. These models have the pretense of sophistication, but one really doesn't need complex math to see whether a price is in an uptrend or downtrend. Over the past week or two the trend-followers have been selling their long positions and going short.



As of Friday's big price drop, the last of these short-term trend followers threw in the towel. All of the black-box trend followers are now on the short side. The sales by these trend followers give the commercial shorts and central planners the opportunity to buy back their existing in-the-money short positions from when they sold everything they could - even throwing the kitchen sink at gold at $1780 and silver at $35 to keep them below these key resistance levels.



These black-box trend followers have been buying high and selling low time and again, getting their pockets picked in the process. But Friday also highlights something else that is ominous. When markets sell off across the board, with the exception of the dollar, which receives the proceeds from various asset sales, it raises the possibility that a Lehman-type blow-up is in the cards. The weird thing is that the Fed may be allowing it to happen. Here's a curious observation, and I'm not quite sure what to make of it.



It's been nearly two months since the Fed announced QE3, but the Fed hasn't been buying any securities. Its balance sheet is the same size today as it was in mid-September when it announced QE3. Why is that? Is Mr. Bernanke purposely not increasing the Fed's balance sheet so that he can't be accused of juicing the markets before the election? Or is there some other factor at work here?



It is a real puzzle, but we know why the stock market is in a funk. The Fed has not been adding any juice to the system. In fact, the amount of total assets in its balance sheet is basically unchanged since last summer. The stock market rose in anticipation of QE3, but is now starting to falter because Mr Bernanke has not opened up the tap, despite his September announcement to do so. As a consequence, the stock market is turning lower, and we have some knock-on pressure being applied to gold and silver.



This observation goes back to an expression coined by Richard Russell which I believe he started in the 1980s - “inflate or die.” If the Fed doesn't start pumping juice soon, the stock market could tank. It's not the economy that has kept stock prices up at these levels; it is Fed money printing.



But importantly, gold and silver do not need Fed money printing to climb higher. They are safe havens that do not have any counterparty risk because physical gold and physical silver are tangible assets. So regardless whether it is Fed money printing or the need for a safe haven, I expect gold and silver to resume their decade-long upward climb.



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The interviews with John Embry, Stephen Leeb, Don Coxe (BMO $538 billion), Rick Rule, James Turk, Egon von Greyerz and Gerald Celente are available now. Also, be sure to listen to other recent KWN interviews which included MEP Nigel Farage, Jean-Marie Eveillard, and Art Cashin (UBS $612 billion) by CLICKING HERE.

That's not easy to answer, but I'll give you my thoughts in point form and then you can draw your own speculative conclusions.

1. What's bad for the US economy is bad for the global economy
2. The Fed does not have the tools nor the ability to combat the effects of a fiscal cliff
3. In a global catastrophe, capital rushes to safe havens... USD is one of them and JPY is the other and CHF is another one but the SNB will not allow that. Also Japan cannot allow the JPY to appreciate too much without intervening. The only other alternatives would be the commodity currencies such as AUD and CAD, but that would seriously damage their economies so they would also intervene.

So, it's extremely difficult to predict what would happen. For sure the markets would be in a very difficult situation trying to figure out where to hide their cash. I guess there's gold if the Chinese haven't hoarded all of it by then.

Best of luck figuring it out.

good luck KB

Considering the fact that there are no other reserve currency contenders USD would probably hold it's safe haven status if something of that nature were to happen.

Thanks for your input PT even if it there was no real definitive answer...

Euro is in limbo as if can not go anywhere or to the dark side.

gold first tp equal my stop met at 1693 euro$ is lagging pair

tp at 2865 min

does any one know good movie to watch so i can wait for 2980

Yep, pretty boring day...

AUD was the biggest mover and it still only moved about 80 pips from top to bottom.

Well, Oil and Gold moved the most so far but they don't count...

AUD and CAD are not safe heavens but "risk-on" currencies. In a serious risk-off environment EURAUD would actually shoot through the roof (the point being that AUD would be the worst performer of all).

But overall yeah, it's difficult to judge what will happen, i would guess that without anything else in the stimulus front markets can be in for "quite the bashing".

Tropic Thunder
very funny....

lol.......

thanks

G&L bro

Here's a really good one. It's 240 hours long. With PA the way it is, you need a very long movie

http://en.wikipedia.org/wiki/Modern_...ding,_Helsinki)

Because there's very little difference between the puppets. They're both corporate liars, slick and dangerorus, chosen to act as a facade. And if there was a difference (suppose Ron Paul was one of them), then to whom it would have mattered would get the results days ahead of everyone else.
ATM you're technically voting for groups of lobbyists, so its not about Obama or Romney, its more like is afghanistan going to get bombed more by Raytheon or by Halliburton? And then, will the wounded get treatment from Pfizer or more from Glaxo? These are the key differences and they have little effect over eur/usd.

Eur deciding whether to close H4 (GMT) green or red and whether above 2803 or below it

Hi there

1,2765 was hit today, but looking the whole market and correlations we could have some correction to (1.284/7) somewhere there and then below 1.2765 and then the market will decide if we go below 1.20 or retest 1.348...

Also 1,5955 was hit yesterday, 1.0330 was hit friday. This is why I am talking about correlations are very important now...

Hi Luis.