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« The Federal Reserve: The Greatest Scam In History (revision B) | Main | President Obama and those AIG Bonuses! »

Federal Reserve to Buy Treasuries fires Gold Prices!

Gold Chart 19mar09

Chart courtesy of

The Federal Reserve has sprung a surprise on the markets by announcing its intention to buy $300 billion in longer-term Treasuries in order to assist the economic recovery.

We were watching gold prices decline throughout the trading day in New York when 'pop' they suddenly took off in a vertical ascent. We tracked around the air waves and found that the BBC World Service had a mention in their business broadcast about the Fed making the above purchase, then we found this article on Market Watch.

The Fed also tweaked its other credit-easing programs by committing to buy more mortgage-backed securities and agency debt and include more asset-backed securities under a new credit facility starting this week.

Most analysts had thought that the Federal Open Market Committee - the policy making arm of the central bank -- would keep the weapon of buying Treasuries in reserve in case of a crisis.

The decision to buy Treasuries shows that the crisis is here.

"To provide greater support to mortgage lending and housing markets," the FOMC said it would purchase an additional $750 billion of agency mortgage-backed securities. This brings the total amount of agency mortgage-backed securities to $1.25 trillion.

The Fed said it would double its purchase of agency debt to $200 billion.

"Moreover, to help improve conditions in private credit markets, the FOMC decided to purchase up to $300 billion of longer-term Treasury securities over the next six months," the statement said.

In addition, many unspecified types of assets will be included in the newest Fed credit facility, the Term Asset-Banked securities.

All of these purchases will increase the size of the Fed's balance sheet. The central bank has already doubled the size of its balance sheet to just below $2 trillion.

Click this link to read the article in full.

Our guess is that the word crisis put a rocket under the price of gold as the Kitco chart above aptly captures.

We are not out of the woods yet as some commentators have suggested – the team here think that we are just entering the woods and its not a pretty sight. Put your hard hats on and prepare for some wild swings in both directions, this market is hanging on to every word and action that hits the air waves and re-acting to whatever the latest sound bite might be. For us the order of the day is stay calm and hold on tight to our stocks. If you are a trader then there are a few 'options' either side of the strike price that will surely get your adrenalin pumping, if thats what you want!

Got a comment – then let us have it!

If you are new to investment in the precious metals sector then you may wish to subscribe of our FREE newsletters regarding gold stocks, silver stocks and uranium stocks, please click on the links.

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Reader Comments (31)

We forgot to mention that this news has had a negative impact on the US Dollar which dropped about 3% to trade at 84.35 on the US Dollar Index.

The DOW managed to hold on to a 90 point gain, with the banks doing well, Bank of America and Citibank both up about 20% and AIG put on a modest 43.75%!

March 18, 2009 | Unregistered CommenterGold Prices

Consider this 'Federal' fear for true monetary deflation. Its coming. ;)

March 19, 2009 | Unregistered Commenterde Graaf

It would appear the shorts were caught leaning the wrong way, inducing an amount of sudden horror. Whether or not that leads to a sustainable rally at this precise moment remains to be seen.


March 19, 2009 | Unregistered CommenterThomas B

This is another giant step toward the Reserve Currency of the 'New World Order'. The dollar is rapidly becoming toasted, helped by the money people that are gearing up for the AMERO. You won't find this info in the main street media. Be aware.

March 19, 2009 | Unregistered CommenterRich M

Can any one comment on Cour D'Alens mines recent annoucement to do a stock reverse split. Does any one have anything positive to say about their wanting to go from 75000000.00 to 75000000 or 1 for 10 reverse. Despite the companies postive cash flow and growing reserves will this still cause the stock to be shorted since a reverse stock splits can be looked upon as a signal that the company is is having fincial difficulties.

March 19, 2009 | Unregistered CommenterDoug

OK, Doug first off all, thanks for asking as I'm heavily invested and I didn't know this yet.
I'm diving deeper now, I get back to you. Please keep me posted if you get any more info.


March 19, 2009 | Unregistered Commenterde Graaf

Allright, here's what I found;

Proposals for 2009 Annual Meeting of Shareholders

At this May's Annual Meeting, shareholders are being asked to approve the following proposals that will continue positioning the Company for the future:

-Elect our Board of Directors;

-Authorize an amendment to our Articles of Incorporation to reduce the par value of the Company's common stock from $1.00 per share to $0.01 per share;

-Authorize the Board of Directors to effect a reverse stock split of the Company's common stock at a stock split ratio of one-for-ten;

-Subject to the authorization to effect a reverse stock split, authorize an amendment to our Articles of Incorporation to effect a proportional decrease in our total number of authorized common shares from 750 million to 75 million and a further increase in the number of post split authorized common shares from 75 million to 150 million; and

-Ratify the appointment of KPMG as the Company's independent Accountants and Auditors

The Board of Directors unanimously believes that the proposed reverse stock split, reduction in authorized shares and change in par value of the Company's common stock are in the best interests of Coeur and its shareholders, and would:

-Enable Coeur to attract a wider shareholder base;

-Bring the Company into compliance with minimum share price listing standards and significantly reduce our NYSE listing fees;

-Provide flexibility for the Company to pursue accretive growth opportunities which may become available in the currently unpredictable economic times and financial markets.

To summarize:
Reducing par value per share is something normally done to clear accumulated losses in a Company.
I'm not familiar with this. Maybe someone could add something to this?

As for the reverse share split, is a good thing. Larger companies are able to invest when prices are higher. Also the stock split from 75M to 150M afterwards is going to support the capital base.

If the reverse split is approved by shareholders, it could be possible that smaller shareholder (don't know how small) are cashed-out. Those shares will vanish. For all other shareholders, the stock value will attract new buyers/investors so the stock can appreciate and widen up for a broader investor audience. Thats basically May 2009.


March 19, 2009 | Unregistered Commenterde Graaf

Thanks so much for answering Mr.Graaf . I own 15,180 shares of cde so if the stock reverses 1 for 10 then i will have 1580 shares instead. Is this right? but what i fear is a possible shorting on the stock that sometimes happens after a reverse. Now that the company is going from spending to earning a net profit in the months to come would it not be more prudent to wait awhile to do a reverse so that the reason to do so would be backed by actual net profitable Quarterly results and keep from having bad news that would contribute to the reason to be shorted. Right now the suits are just making forward looking statements that can evaporate.
So do you recommend approval of reducing the par value and the reverse split. my wife and I we wiil be attending the annual meeting in May so this is why I wanted to know.

March 19, 2009 | Unregistered CommenterDoug

I have to admit I am new to the process of reverse splits and reduction of par value. So I'm learning together with you. As for your question; 1580 would be 1/10th. You passed the arithmatic test. ;)

I will look into the par value issue. As far as I can form my opinion, I say I would vote for approval at the annual meeting.

Any veterans around that can add something about share par value?


March 19, 2009 | Unregistered Commenterde Graaf

Mr Graaf look at the price its up by .22 cents today and a high of .90 cents. can this reverse split news be the motivator? almost 23,000000 shares traded!!

March 19, 2009 | Unregistered CommenterDoug

I thought so too! Demand is growing already ;)

March 19, 2009 | Unregistered Commenterde Graaf

Well i hate too say it. But this has been going on for hundreds of years. The worst thing to do though. will to wait until its too late and end up rioting in the streets.. Because of the state of the nation..

why do you think there are over 600+ FEMA camps (concentration camps) sprung up all over America in the last few years ? Because this economic collapse is by design. Its really got nothing to do with Gold Bullion, the stock market or money.

It is however all about control, power and ideology. Freemasons, Satanic rituals and a new world order..

But if you think this is bad.. wait until all money is controlled electronically using the RFID that is already in practice.

What you people also fail to realise is.. These banking dynastys, also funded every war on earth! EVERY SINGLE ONE. And they will fund and get rich from WW3 when they start it. And trust me 100% when i say THEY will start it.. And it will be Nuclear somewhere around Israel

March 21, 2009 | Unregistered CommenterGold Bullion

Haven't you read a bit too much conspiracy theorem?
I can agree with something, the Rothschilds dynasty is in control of the worlds banking sector. Most people don't know how this banking family inherits the largest, if not all power across the financial world. But in my view, they are crumbling now like the rest.

Why would this be a controlled collapse by design? Is the free market completely powerless?

Explain yourself Mr. Doomsayer ;)

March 21, 2009 | Unregistered Commenterde Graaf

Mr De Graaff, I had for many years heard that John Rocketfeller and the world central Banks Have invisioned one world goverment and one world currency call the Phoenix.
This rfid system was invision back in the 1950's. According to some sources that i have research these men that seem to have no authority put on them have been wanting to have a system that where the only value is dictated by them and no currencies changes hands and if you dont agree with them then all they have to do is shut your chip off and you are with out. Very much like the 666 system of Revelations of the Holy Bible.
I know all this sounds far fetch but i have found all this on you tube by people that swear all this is coming and that Goerge jr was the one that signed agreements with mexico and canada in the North American Alliance pact which was done all in secret.
there are pictures on you tube that shows over a million plastic coffins all stack up in piles some where in louisianna and it said that there are more 18 other states including Alaska.
With the country in financial mess . I dont see that things are not so full of balonee. This country is will be going into great shift of power and I beleive it was George Bush jr.that was the man that is resposible for all these things coming about or put into motion.
I could be wrong but I have seen the vidoes on 9/11 and i beleive that it was highly unlikely that only one
aircraft can send a whole building down to its foundation
I have watch the vidoes that show explosions were being done on the towers just before the collasp of the building reach that leval all the way down. Just like what happens when a building demolition implodes.
In kindness I challege you to see for yourself from the news footage from that time and judge for your self

March 21, 2009 | Unregistered CommenterDoug

First of all, I still do not agree with the conspiracy of a controlled collapse by design. Its doesn't fit in my view on people. Some may have significant power, but like a JP Morgen Stanley strategist once said: Government entities aren't as smart as some people think they are. And thats a moderate expression if you know that politics work on populism and ratings of constituents.

I do have my doubts about the 'official' 9-11 issue. I've seen the footage you talk about and the documentaries that discuss the requirements for a building like the twin towers to collapse like it did. An airplane couldn't have caused the controlled demolition effort normally performed by pyrotechnic professionals. I don't have any proof of that, but this is my opinion. Its nearly impossible unless it has been constructed to disintegrate like it did. Surely this is not the case for the NY WTC Twin towers.

Its remains a big guess. I don't have the facts, neither do you and I think to much conspiracy brings you in a dream-state that isn't real. Corruption occurs, gold manipulation also plausible, financial constructions yes but a world financial collapse by design....No.
If derivates will result in the collapse of our capitalistic system, the rapid shifts in power and wealth might result in world panic. This in consequence might result in protectionist measures and civil unrest across the globe and lastly a world war III. Highly unlikely I think.

I think the US issues are focussed the symbiotic 'Chimerica' relation, don't you think?
Like Peter Schiff used this priceless quote:

“…we’re like Tom Sawyer, and we convinced the world to paint our fence, but you know what? They don’t want to paint it anymore…”

Its time for America to wake up out of the dreamstate and actually rebuild a viable economy instead of borrowing from banker nations in Asia's Pacific region.

Back to reality Doug.

March 21, 2009 | Unregistered Commenterde Graaf

Hi deGraff,

Your missing the "Bigger picture" - which is what they want you to miss.

when you say world financial collapse couldnt possibly be because they would be hurting themselves.. Is a terrible missjudgement. Like i said this has nothing to do with money. Money is just paper that is created out of fresh air at the Federal reserve which they own and control.

The fact is the people on power have an agenda. An ideology based on Paganism & Freemasonry. Which is satanic worship.. (believe it or not - its true)

Every single president from the last 100yrs has been a member of this group. Wether it be the democrats or republicans. The fact is whoever you vote in. It is still the same people. Politics is meaningless. Ask yourself does anything really change when the opposition comes into power ?.. Answer is NO. Same Agenda, Same ppl, they just give you a different face to believe in.

Obama is a shrill. He has already gone back on everything that got him into power. troops in iraq, no more war. Hes already bombing north west pakistan. Which the news wont tell you about.

You also say "too much Conspiracy leads to a dream state" - these arent conspiracys, they are facts. By government papers. footnotes of government papers. Things you dont hear about. wispers in the wind that have hold little merit to people who dont understand, but massive impact to everyone on the whole.

The bail out bill was supposed to be read over 5 days. Congress were given 5 days to read it. Remember Obama went on holiday ? Smiling for the cameras saying we have loads of time. blah blah. Turns out congress were given 1hr to sign yes. And if they didnt they were threatened that the economy would BE collapsed completly. Its documented go read it.

DeGraff . i emplore you to go watch some videos read some articles. Educate yourself and re-evaluate whats going on in the world. BEcause when you start to see what is going on, then maybe you can ask why its going on, and maybe that will lead you to the truth and reality..

Check out these things
Google ="Zeitgeist" movie
"Codex Alimentarius"
9/11 tyranny

Just do yourself a favour, and anyone else reading this.. do not dismiss it as conspiracy until you have watched it, read it and understand where its coming from.

- good luck and peace
- Grow some vegetables (Food shortages coming next)

March 22, 2009 | Unregistered CommenterSilver Bullion

thank you fot your response

March 22, 2009 | Unregistered CommenterDoug

My pleasure, as always ;)

March 22, 2009 | Unregistered Commenterde Graaf

Re: Silver Bullion comments - All reading these postings should pay attention. The word conspiracy is a misnomer for what is happening. It is the Master Plan for the New World Order, first mentioned by G.H.W. Bush, during his brief presidency. He only did it once & got shut down by the people that really are in control of the worlds financial system. People, do your homework & don't be duped by the politicians & pablum coming from the controlled media. Read all you can from reliable sources of public information. Be prepared for some very rough times ahead.

March 23, 2009 | Unregistered CommenterRich M

Common people. Where did I end up now, for heavens sake.

Are you serious? Conpiracy this, masterplan that...
I think you've all been playing Tom Sawyer for some time now and got a bit too much of the terpentine odour stickin' in the nostrils by now!

If there was a masterplan, where did I take America today? From dreamlike abundant oil user 'advancing' to the buying power of a slumdog millionaire in a Banana republic?

I'm exaggerating now, I know but come on people. Get real.

March 23, 2009 | Unregistered Commenterde Graaf

de Graaf - One of these mornings, soon, you will wake up & say to yourself 'what happened ? what did I miss ?? Good luck in your endeavors.

March 23, 2009 | Unregistered CommenterRich M

I know its "insane" to even think there could be somthing bigger than what we perceive. But unfortunatly the more i read the deeper i dig the worse it appears.

Ok take "Codex Alimentarius" for instance.. Have you ever heard it it ? My guess is not.. but why not ? Because it is coming into LAW on Dec 31st 2009.. Yes end of this year..

What is it ? It is regulation and control of our Minerals and nutrients. Why do they need regulating ?.. Well what Codex Alimentarius is going to do is. Re-classify Minerals and Nutrients in all forms as TOXINS.. Yes thats right "poisonous toxins".. Vitamin A, B C D etc - everything. So they then need to be regulated and controlled by big Drug companys, because they are "poisonous".

Why would they do this ?
Simple.. To make more money and have more control. There plan (and this is not some fantasy).. Is to Radiate all food under the guise of "killing of bacteria".. But this process will kill all "healthy bactria" too.. So how do you get your nutrients and Minerals ?

You buy them in supplimental form. and take them as pills.. Which will start out nice and cheap to make everyone feel comfortable that the gov is helping us - blah blah. When infact the suppliments will rocket in price.. and the suppliments themselves will be a very poor immitation of themselves. Meaning they will be weak and useless. Leaving us all very ILL.. By there own admissions.. the implimentation of Codex Aimentarius will wipe 2-3 Billion people off the face of the earth..

Check out "Georgia Guide stones" - the powers that be had it errected many years ago.. To tell the world what they plan to do.. and no one is interested.. Now thats insanity.

Look laws and regulation and papers are already already in place to strip food labels of their mineral and nutritional value.. and all other labelling.. So basically we have no idea what were eating. Under the guise of competition laws etc.

Also de graff, Do you drink Tap water ?.. Is there Flouride in it ?.. DO you know what Fluride is ?.. Supposed to be good for your teeth isnt it ?. .Or so what they tell us.

Did you know Flouride was used in Natzi concentration camps throughout WW2 ?.. Why = Because the main side effect of Floruide is complacency.. Meaning noone can be arsed to do anything.

- All im asking is for you to investigate this for yourself.. and find the facts.. the choice is yours! - Peace :o)

March 23, 2009 | Unregistered CommenterGold Bullion

Give me one thing to look out for. Something concrete in your understanding of happenings.

In my understanding, you're seeking for explanations that just aren't there.

One example of without me watching 2 hours of video with skulls and dark trenched faith...

March 23, 2009 | Unregistered Commenterde Graaf

de Graaf - check out the research and writings of Charles Savoie. It is quite a lot of reading, but you can not get yourself educated with sound bites and news highlights. Also, since you are an educated person, could you please have your sentences grammatically constructed so that they make sense and please check your spelling too. Have a nice.

March 23, 2009 | Unregistered CommenterRich M

Í am sorry that I have vastly disappointed you in my efforts to write a proper response...

Have a nice, what? Doomsday?

Nevermind ;)

March 23, 2009 | Unregistered Commenterde Graaf

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