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History May View ECB’s Draghi As "Currency Forger Of Europe"

Tyler Durden's picture


From GoldCore

History May View ECB’s Draghi As "Currency Forger Of Europe"

Today the London Bullion Market is closed for a national holiday.

Friday’s AM fix was USD 1,666.50, EUR 1,329.16 and GBP 1,051.88 per ounce.

Silver is trading at $30.91/oz, €24.77/oz and £19.62/oz. Platinum is trading at $1,550.00/oz, palladium at $647.90/oz and rhodium at $1,025/oz.

Gold climbed $0.80 or 0.05% in New York on Friday and closed at $1,669.80. Silver surged to as high of $30.71 and finished with a gain of 0.52%.  On the week gold climbed 3.3% and silver gained a whopping 9.3%.

Cross Currency Table – (Bloomberg)

Gold hit a high not seen since mid April on Monday, continuing the momentum from last week’s gains as investors expect further monetary stimulus from central banks and become increasingly concerned about inflation.

Consumer price inflation data in the US is due Friday and is expected to move higher on higher fuel and food costs.

There may be more hints of further cheap money from the Jackson Hole Symposium later this week as finance chiefs gather to discuss economic policy behind closed doors.

Monetary risk remains high especially in the euro zone after Jens Weidmann, head of the Bundesbank, sent a shot across the bows of the ECB’s Draghi and likened the mooted ECB bond-buying plans to a dangerous drug. 

Merkel praised Weidmann for speaking out about his doubts and said she saw strong Bundesbank influence within the ECB as positive. But she took care not to voice any support for his criticism of Draghi's policies.

Weidmann rejected suggestions that he was isolated on the ECB Governing Council in having such reservations. "I hardly believe that I am the only one to get a stomach ache over this," he said.

Alexander Dobrindt, a senior German politician who has been the Executive Secretary of the Christian Social Union of Bavaria since 2009, was more direct, saying Draghi risked passing into the history books as the "currency forger of Europe".

A conservative ally of Merkel, Dobrindt echoed Bundesbank’s Weidmann that Greece should leave the currency bloc by next year.

The comments show the huge divisions in Germany over the debt crisis now in its 3rd year and the understandable concerns of inflation and even hyperinflation. 

The Bundebank and senior politicians and allies of Merkel may thwart Mario Draghi’s big plans to do “whatever it takes” to solve Europe’s financial collapse. 

One way or another, the euro is certain to fall in value in the long term. 

Gold in USD 2 Years – (Bloomberg)

As was pointed out by Merryn Somerset Webb at the weekend (see commentary) the euro has defied negative commentary but the question is for how much longer. 

The fundamentals of the euro are appalling – just to keep eurozone broad money supply from contracting alone will take a whopping €3 trillion.

“The euro is clearly a bad currency by any definition.” While some fund managers advocate shorting the euro, we believe this is a high risk strategy for investors as in the short term the euro could stage a strong rally – should for example Grexit happen. A ‘core euro’ could and would likely become stronger.

Therefore, investors and savers best way to protect against a fall in the value of the euro and indeed other fiat currencies is to have an allocation in physical gold.

US economic data published this week follows.  Today is the Chicago Midwest manufacturing index for July at 1230 GMT. Tuesday is the Case-Shiller 20-city Index and Consumer Confidence.  Wednesday is GDP, Pending Home Sales, and the Fed’s Beige Book. Thursday is Initial Jobless Claims, Personal Income & Spending, and Core PCE Prices. Friday is Chicago PMI, Michigan Sentiment, and Factory Orders.

For breaking news and commentary on financial markets and gold, follow us on Twitter.

(Bloomberg) -- Platinum to Trade at Premium to Gold
Platinum may trade at a premium over gold within six months as a lower supply of the white metal boosts prices, according to Jeffrey Rhodes, global head of precious metals at INTL FCStone Inc.

Platinum may climb to $2,000 an ounce by December, while gold advances to a record $1,975 an ounce, Rhodes said at a conference in Hyderabad, India today. Spot platinum ended at $1,549.75 yesterday after rallying on supply disruptions in largest producer South Africa. Gold was at $1,670.55.

G10 and Precious Metals Currency Ranked Returns – (Bloomberg)

(Bloomberg) -- Platinum Prices More Bullish Next Year, Standard Chartered Says
Platinum prices may climb next year on less supply from mines in South Africa, the biggest producer, Jeremy East, global head of metals trading at Standard Chartered Bank, said.

Platinum is more bullish next year because many mines in South Africa will be closing, so supply will be reduced and the market will be more balanced, East said at a gold conference in Hyderabad.

“Tighter regulations and problems at trade unions have created a lot of challenges at the production side,” he said.

Gold may climb to $1,750 an ounce by December because of problems in Europe and a possibility of further stimulus programs to boost economies, he said.

(Bloomberg) -- Gold Traders Increase Bets on Price Rise, CFTC Data Shows
Hedge-fund managers and other large speculators increased their net-long position in New York gold futures in the week ended Aug. 21, according to U.S. Commodity Futures Trading Commission data.

Speculative long positions, or bets prices will rise, outnumbered short positions by 130,684 contracts on the Comex division of the New York Mercantile Exchange, the Washington-based commission said in its Commitments of Traders report. Net-long positions rose by 16,380 contracts, or 14 percent, from a week earlier.

(Bloomberg) -- Silver Traders Increase Bets on Price Rise, CFTC Data Shows
Hedge-fund managers and other large speculators increased their net-long position in New York silver futures in the week ended Aug. 21, according to U.S. Commodity Futures Trading Commission data.

Speculative long positions, or bets prices will rise, outnumbered short positions by 21,200 contracts on the Comex division of the New York Mercantile Exchange, the Washington-based commission said in its Commitments of Traders report. Net-long positions rose by 5,613 contracts, or 36 percent, from a week earlier


Gold Surges Amid Inflation Concerns – Wall Street Journal

Gold hits 4-1/2 month high on Fed stimulus hopes - Reuters

Gold Set for Best Year Since 2010 as Stimulus Bets Stoke Demand – Business Week

Merkel tries to calm storms over Greece, ECB policy - Reuters


Somerset Webb: Euro defies gravity – but not for much longer – The Financial Times

Keiser Report: Debt Bomb – You Tube

Brimelow: Is Gold Heading To $4,500? – Market Watch

Bundesbank's Weidmann Warns: Debt Monetization Is An Addictive Drug – Zero Hedge

Republicans tease with gold standard, but idea seen full of bugs - Reuters

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Mon, 08/27/2012 - 09:06 | 2740602 GetZeeGold
GetZeeGold's picture



I think it's still perfectly legal in Europe.


Maybe someday they'll pass a law against it.



Mon, 08/27/2012 - 09:05 | 2740603 Inthemix96
Inthemix96's picture


History may also view draghi as a cunt.  A fucking gormless, shitheaded, thieving cunt.

Mon, 08/27/2012 - 09:07 | 2740607 GetZeeGold
GetZeeGold's picture



Cat looks pretty good in a suit though.......gotta give him that.


Mon, 08/27/2012 - 09:09 | 2740615 Inthemix96
Inthemix96's picture


He would look a damn sight better with piano wire round his over indulged fucking neck mate.

Cunts, one and all of them

Mon, 08/27/2012 - 09:14 | 2740629 GetZeeGold
GetZeeGold's picture



I think Saxs is having a sale this week. Free piano wire with your suit purchase this week. Offer not valid in Europe.


Mon, 08/27/2012 - 09:11 | 2740619 TheSilverJournal
TheSilverJournal's picture

Germany's trying to take over Europe. I've never heard of such a thing before.

Mon, 08/27/2012 - 09:11 | 2740620 bank guy in Brussels
bank guy in Brussels's picture

Re being not « ... the only one to get a stomach ache over this ... »

Of course, they all have a tummy ache about the strange things they have to do ... but they are in (semi-secret) agreement, they will print, like all the other central banks ... to prop up German banks and insurers and pension funds along with everyone else

History will view Draghi as people somewhat view him already, doing his clever wily best in a very dodgy situation

And re the euro dropping in value, that is champagne-glass clinking time for exporters in Germany ... that is what they want

Mon, 08/27/2012 - 09:12 | 2740622 Oh regional Indian
Oh regional Indian's picture

Draghi Draghs Drachma Dealing Douchebags Down Doing Dirty Deeds During Dark Days...

Mon, 08/27/2012 - 09:13 | 2740625 LetThemEatRand
LetThemEatRand's picture

Draghi is enriching himself and his close allies and will live out his days in great wealth regardless of how much of a disaster his policies turn out to be.  He's a banker.  What more does anyone need to know, really.

Mon, 08/27/2012 - 09:18 | 2740646 machineh
machineh's picture

He's a banker. 

He's a barker, as in carney barker.

This way to the egress!

Mon, 08/27/2012 - 09:15 | 2740635 Inthemix96
Inthemix96's picture

And, in my highly sought after, and often provocative opinion, draghi may even in the books of history be recorded as a,

Spineless, cock sucking twat.

Wait till the mob gets its hands on that fine suit he wears.

Mon, 08/27/2012 - 09:16 | 2740636 ArkansasAngie
ArkansasAngie's picture

These guys aren't interested in history they are worried about their personal checking accounts and power.

Civil court judgements?  Personally I will not be happy until the rule of law is restored and criminal cases are brought.

The scape goat of national security is a sham.

Mon, 08/27/2012 - 09:17 | 2740641 falak pema
falak pema's picture

How will history then view Bernanke? As Grave digger of american capitalism?

Draghi will make or break, as buffer proxy money maker for Bernanke; he is Quisling to Bernanke's role as global fiat blitzkrieg scammer. First world debt ponzi machine. 

Unless... the EU has a power play which is not yet visible in this crazy race to bottom, but I doubt it. Euro is too inextricably linked to USD shenanigans via the bankster derivative soup. The debt tsunami does not chose its victims, it takes all before it when it unfurls. 

Meanwhile the thieves fall out as the musical chairs game on the Titanic gets faster in tempo. September and October are tough months. Before the November election...

Gold won't protect the world from debt collapse, asset collapse and eventually war. 

Mon, 08/27/2012 - 09:20 | 2740650 GetZeeGold
GetZeeGold's picture



That's why everyone should have a least a little bit of silver.


Mon, 08/27/2012 - 09:18 | 2740644 SheepDog-One
SheepDog-One's picture

Theyre monetizing the debt before the big takedown thats all.

Mon, 08/27/2012 - 09:20 | 2740647 magpie
magpie's picture

What or whose history ?

Mon, 08/27/2012 - 09:25 | 2740657 Inthemix96
Inthemix96's picture

Hows this for ironic then?

I bought the wife a nice new orange vibrator for her birthday.

She said to me "thats funny, it looks like a giant carrot"

I said "funny you should say that darling, you're fanny does look like a donkey yawning"

Fucker wouldnt speak for a week after that?????

Mon, 08/27/2012 - 09:35 | 2740688 Jim B
Jim B's picture

Draghi is all about protecting his little ECB fiefdom...

Mon, 08/27/2012 - 09:52 | 2740713 Its_the_economy...
Its_the_economy_stupid's picture

Gernmany's central bank and large private banks have pawned off on the ECB all of their worthless Greek debt. NOW, they want greece out of the union. SOB's stick the EU taxpayer w piece of crap securities, necessitating currency inflation to pay it off, and now want Greece out (as soon as they have off-loaded all the Greek gold and any other decent assets.


Mon, 08/27/2012 - 09:57 | 2740724 legal eagle
legal eagle's picture

That history is today.

Never say never, the "certainty" that the Euro will fall is not so certain if the weaker nations leave.

Mon, 08/27/2012 - 10:01 | 2740733 Peter Pan
Peter Pan's picture

Currencies and central banks whether they be in Europe or the USA can never take the place of a sensible fiscal policy, limited government and a free market. Now everyone looks to the central banks for a print solution in the hope and belief that this is all that is needed to overcome the recession, the insolvency issues, the liquidity issues and the political issues.

Draghi is deluded and the Germans are right to be worried. History tells them to be worried.

It is about time the world realised that the problems that the world faces are basically of a logistical nature and as such require a re-assessment of how the free market can match resources and needs in the most optimum manner possible so as to maximise the outcomes for society.


Mon, 08/27/2012 - 10:10 | 2740750 LongSoupLine
LongSoupLine's picture



Stop saying "Drahgi of the ECB".  He is a Goldman employee first and foremost...period.

Mon, 08/27/2012 - 10:17 | 2740770 ThisTimeIsDifferent
ThisTimeIsDifferent's picture

"The Bundebank and senior politicians and allies of Merkel may thwart Mario Draghi’s big plans to do “whatever it takes” to solve Europe’s financial collapse. "

Wie soll das gehen?

Germany, Austria, Finland and The Netherlands are still in a solid minority position in the ECB council.

The ECB will print as soon as the shit begins its final descent to the fan area.

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