Europe's Reaction To The European Central Bank's QE Program

Every time the rumours and pre-announcements of Europe's 'asset purchase' program swirled, gold took another step higher against the euro.

Like the dollar, of course. 

And it certainly looks like the purveyors of fiatscos are engaged in a 'race to the bottom,' in order to devalue their currencies to promote exports as a means of growth.  

 

Not the dollar though.  The holders of the reserve currency must make sacrifices, jobs-wise, to achieve banking supremacy.   The US middle class will serve as cannon fodder.

This is what passes for stimulus, where you do not wish to stimulate aggregate demand in your own nation by allowing the broader public to have better paying jobs.  The policy in the West seems to be sending packages of money directly to the overlords, so as not to upset the balance of inequality, where a very few have most of the money and power.

The difference in this 'currency rigging' is that no one owns a gold bullion printing press.

Well, one could make the case that leveraged and rehypothecated gold is one way to devalue it.  And add a significant amount of mispriced counterparty risk along the way as well, which is what they jokers seem best equipped to do.

While the rigging music keeps playing, that is, and people are content to hold claim checks rather than the real thing.

But once the rush to obtain the real thing starts, my, won't that be a sight to see.

 

Gold Daily and Silver Weekly Charts - Davos Man and High End Looting

"The issue which has swept down the centuries and which will have to be fought sooner or later is the people versus the banks."

John Dalberg Lord Acton

“When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done.”

John Maynard Keynes

It was all about the ECB today.  And do not think for a minute that this asset purchase program is designed to benefit the broader economy.   It is a subsidy program for those who own financial paper and the Banks

Gold and silver were pushing higher against key resistance and a short term overbought condition on the word from Monsieur Draghi that the ECB will be handing over about a Trillion per year to misprice the risk in financial assets.

This asset purchasing will not have much impact on the real economy, but it will inflate the price of paper assets, especially the kind of debt held with leverage by the wealthiest one percent, delivering profits in tax subsidized forms of income.

Gold is consolidating nicely, and as we showed intraday with the NAV premiums, the gold-silver ratio has dropped back down to 70, which although quite high is not as stratospheric as it has been. Even the premiums of the trusts and funds in precious metals have normalized a bit.

The strong dollar is good for importers and the Banks. And that is why most of the developed world, particularly Japan and Europe, are trying to devalue their currencies. But is hard to imagine how all of fiat price rigging is going to provide a benefit to the real economy.  It starts to look more like high class looting from a distance.

This is going to further taint genuine economic activity with financialisation, and make the task of prompting a recovery that is self-sustaining that much more difficult.

The US financial sector will be benefitting enormously from this European QE, such are things these days with the global multinationals.

And as for the rest of the people, the vast majority? Time to lower your expectations, for you and your children.   At least you will be given the privilege of voting for one of the candidates of their pre-selected choice next year.

 

Have a pleasant evening.

 

SP 500 and NDX Futures Daily Charts - Madness

"What Wall Street and credit card companies are doing is really not much different from what gangsters and loan sharks do who make predatory loans. While the bankers wear three-piece suits and don't break the knee caps of those who can't pay back, they still are destroying people's lives."

Bernie Sanders

The ECB brought out a 'bigger than expected' asset purchase program this morning, as least compared to the leaks which they put out into the market earlier this week.

Stocks rallied on the news. This is pure financial asset inflation, and it will not end well.

The ECB will be 'proportionate' in the asset purchases, meaning France and Germany get the lion's share, and the Banks and financial firms will have their hands out at the very back of the truck, which has been backed up to their loading docks.

This is more 'trickle down' stimulus. It will not trigger broad inflation, because the money being created is wrapped nicely in packages and sent to the wealthiest in the form of the mispricing of risk on financial assets paper.

Have a pleasant evening.

NAV Premiums of Certain Precious Metal Trusts and Funds

 

The gold/silver ratio has come back down a bit from the stratosphere, but it is still historically a bit high.

The premiums/discounts have certainly picked up a bit, from the very depressed levels of last year.

The cash level in the Sprott Silver Trust continues to fall, indicating a secondary offering ought to be in the works.

 

 

Gold Daily and Silver Weekly Charts - Early Days

After a morning smackdown gold was able to hold its level just below 1300, with silver showing a little more resilience.

Tomorrow we should hear the official word from the ECB, after the 'leak' today of over a trillion in QE per year.

The central banks of the West are 'plowing the oceans.'

The Bank of Canada gave us a surprise rate cut, justified by the shocking slump in oil revenues.

This interview with Jim Rickards is worth a look.

Next week we will see an option expiration on the Comex which *could* be a test for this rally.

For this precious metals rally, it is still early days.

Have a pleasant evening.

 

 

Carl Perkins, Johnny Cash, Elvis Presley, Buddy Holly

SP 500 and NDX Futures Daily Charts - Exceptional Delusions

Stocks managed to work out a ragged rally after poor economic news, and triumphalism about The Recovery in the State of the Union speech.

Have a pleasant evening.