Everything was going fine until around an hour before the stock market closed in NY. Then the markets began a sell off and over 90 minutes had the Euro off 140 pips, the S&P down 12 points and gold down 20 dollars.
It appears that a special meeting (READ EMERGENCY) has been called for this weekend by the G-7 FINANCE MINISTERS. The details are below but here are a few comments first.
Every time there is a FOMC or G7 or G20 meeting the metals usually suffer and the control boyz usually jump on gold. Not always but almost every time. I cannot tell you how many times the meetings come on the EXACT CYCLE TURN DATES or the weekend of them. It is uncanny. It also comes at a time when Thursday and Friday are LONG RANGE PRICE potential days.
This is the G-7 and not the G20.
With the rapid deterioration of the Global economy, the worry of deflation and the large amount of interest rate cuts this week, the creation by the BRICS of their own WORLD BANK a direct threat to the IMF, the potential cash exodus coming out of Europe's bank since Cyprus, the failure of austerity and nations turning against it the speculation of what could be happening is many.
The worry of course is a liquidity squeeze where banks do not have enough cash to function. Keep in mind all by 1 penny to the dollar is kept as reserves and the rest is lent out. It wouldn't take much to drain the system. Of course this is speculation. I don't know what the meeting is about.
(Reuters) - Some of the world's most powerful finance chiefs will meet in an English stately home on Friday and Saturday to try to speed up banking and finance reforms, with Cyprus' near meltdown fresh in their minds.
Finance ministers and central bank governors from the Group of Seven industrialized economies probably will not break new ground on how to fix the weak world economy as discussions at the International Monetary Fund took place just three weeks ago.
Officials from two of the G7 economies said the talks - on Friday and Saturday at a 17th-century country house 40 miles northwest of London - were likely to focus more on the slow progress of reforms to banking and finance around the world.
"It's very rare for a G7 to focus on financial regulation," one of the officials said, speaking on condition of anonymity.
The emergency rescue of Cyprus in March acted as a reminder of the need to finish an overhaul of the banking sector, five years after the financial crisis began.
"It makes sense for the G7 financial leaders to send out a message, from high up, that global efforts to ensure financial stability via appropriate regulation must continue," the official said.
Germany may come under renewed pressure to give more support to a banking union in the euro zone as it did at the recent IMF/G20 meeting in Washington. The idea was proposed last year to help strengthen the single currency area but Berlin worries it may foot the bill for future bank bailouts.
While the first step - to create a single bank supervisor under the European Central Bank - looks set to be in place by mid-2014, a second pillar, a 'resolution' agency and fund to close failed banks, is in doubt. And there is little prospect that a third leg, a single deposit guarantee scheme, will ever see the light of day.
"We welcome those discussions," a senior U.S. Treasury official told reporters in Washington. "I think Cyprus just further highlighted the importance of moving to break that feedback loop between sovereigns and bank balance sheets."
Another G7 official said new rules for derivatives trading and the Basel III plan for minimum bank capital levels were running behind schedule and would be among the issues the G7 would discuss, as well as the risk of a reversal in soaring share prices in some countries which contrasts with weak growth.
But some of the officials said they said they did not know why Britain, which is chairing the G7, had called the meeting.
"I am really annoyed that I've got to give up my weekend for this," one complained, adding the talks could have taken place on the sidelines of IMF's meetings in Washington in mid-April.
A British finance ministry official said there was value in informal talks among the world's biggest industrialized economies but declined to comment on the agenda.
CHANGED ROLE FOR GROUP OF SEVEN
G7 finance ministers and central bank governors used to hold global markets in their thrall when they met, given the combined financial firepower of the group's members - the United States, Germany, Japan, Britain, Italy, France and Canada.
But it lost its mantle as the main forum for thrashing out differences over the global economy in 2009 when responsibility was passed to the wider Group of 20 which includes emerging heavyweights such as China, Brazil and India.
Since then, the G7 has met on the sidelines of G20 and IMF meetings but has held few standalone meetings although officials say the smaller grouping makes for more open discussion.
"As often is the case, the G7 is a photo opportunity. But it's important that it stays together as a forum to address the issues," said Marc Chandler, global head of currency strategy at Brown Brothers Harriman in New York.
The U.S. official said Washington would keep up its calls on Europe to boost demand and maintain its focus on Japan's aggressive monetary policy which has raised U.S. concerns about a weakening of the yen.
A Canadian official said discussions would again focus on the right degree of belt-tightening for debt-laden countries which are struggling to get their moribund economies growing and have relied heavily on massive central bank stimulus.
No communiqué and no formal decisions are expected at the meeting which would instead help prepare the way for a G20 leaders' summit in Russia in September.
It comes at a relatively good time for its host, UK finance minister George Osborne. He will be able to point to a few signs of life in Britain's stagnant economy that have taken some of the heat out of criticism of his austerity policies.
The meeting will also be a chance for the G7 to get to know new members of the group - such as the finance ministers of the United States and Italy - and to bid farewell to Mervyn King, who retires from the Bank of England in June.
(Reporting by members of the Reuters G7 team, editing by Mike Peacock)
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Let's look at the portions in bold print.
speed up banking and finance reforms & Cyprus' near meltdown
I read this that the stresses in the banking system are much greater than what it seems on the outside. I suspect that the trust and confidence of the banking system has been greatly diminished. I suspect that there are money flows coming out of Europe and out of the banking system that are making things even more unstable. if you lived across from Cyprus or in Italy, Portugal, Spain and other nations, would you be removing your money out of the system? I think I would. Survival instincts can sometimes kick in.
"It's very rare for a G7 to focus on financial regulation," one of the officials said, speaking on condition of anonymity.
The confidence levels may have reached a tipping point from the population or from the BRIC nations. Austerity has failed and nations are ganging together and turning on Germany and the IMF.
Recall that the BRICS have instituted their own BANK last month. This has to be a direct threat to the IMF and the ol' boy network. Notice how it says G-7 and not G-20.
Here are the headlines from the new BRIC bank:
BRICS Nations Plan New Bank to Bypass World Bank
Are BRICS Countries Moving Away From the U.S. Dollar?
BRICS countries dump the euro, establish bank
Watch Out, World Bank: Here Comes the BRICS Bank
The Brics are building a challenge to western economic supremacy
"It makes sense for the G7 financial leaders to send out a message, from high up, that global efforts to ensure financial stability via appropriate regulation must continue," the official said.
Again it says G7 and not G20. To me the message akin to when a company is in trouble and the management comes out to ensure that everything is going to be ok and changes are going to e made.
Another G7 official said new rules for derivatives trading and the Basel III plan for minimum bank capital levels were running behind schedule.
The truth of the matter is that the banking system did not have enough HIGH COLLATERAL ASSETS to meet the new Basel requirements. In other words the assets they hold are mostly LOW COLLATERAL ASSETS.
For a full report on whats going on and why BASEL has not been implemented;
Desperately Seeking $11.2 Trillion In Collateral, Or How "Modern Money" Really Works
declined to comment on the agenda and No communiqué
No one is going to get to know what the meeting is about. What does that tell you.
has raised U.S. concerns about a weakening of the yen
has raised U.S. concerns about a weakening of the yen
Currency wars are in full bloom. Japan is now outselling Germany in cars. Europe is heading into recession and coming apart at the seams as one currency for 24 countries is not going to work.
The bottom line is i'm not sure what the CONTROL BOYZ have in mind for gold. I'll update if i move my stop or decide to get out.
YOU SHOULD NOT TAKE ANY MATERIAL posted on this BLOG AS RECOMMENDATIONS
TO BUY OR SELL GOLD OR ANY OTHER INVESTMENT VEHICLE LISTED.
TO BUY OR SELL GOLD OR ANY OTHER INVESTMENT VEHICLE LISTED.
Do your own due diligence.
No one knows tomorrow's price or circumstance.
I intend to portray my thoughts and ideas on the subject which may s be used as a tool for the reader.
I do not accept responsibility for being incorrect in my speculations on market trend.
I intend to portray my thoughts and ideas on the subject which may s be used as a tool for the reader.
I do not accept responsibility for being incorrect in my speculations on market trend.
King Regards
