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A Shocking €1 Trillion LTRO On Deck? CLSA Explains Why Massive Quanto-Easing By The ECB May Be Coming Next Month
It is a pure coincidence that following the previous report of stern condemnation of traditional ECB QE in the form of Large Scale Asset Purchases (LSAP) by the Bundesbank, we should follow it up with the latest analysis by Chris Wood of CLSA's famous Greed and Loathing newsletter, in which the noted skeptic does an about face on his existing short European financial trade and covers such exposure, while observing the much-discussed major shift in ECB liquidity provisioning as the catalyst. As he says, "the main reason to do [cover the Euro short fin trade] is the potential for a benign interlude provided by the ECB’s increasingly aggressive liquidity support for the European banking system." And while his trade reco may or may not be right (if we were betting people we would put our money on the latter), what is interesting is the basis for the material change in exposure which to Wood is explained simply by the dramatic shift in the ECB approach toward monetary generosity, courtesy of the arrival of ex-Goldmanite Mario Draghi. The basis is the first noted here massive surge in the European balance sheet (Figure 2) which while not engaging in prima facie monetization, has done so via indirect channels, in the form of an LTRO, which is basically a 1%, 3-year loan, but more importantly, a balance sheet expansion which while having failed to increase the velocity of money in any way (with all of the LTRO and then some now having been redeposited back at the ECB as reporter earlier), has at least fooled the market for the time being that any sub 3 Year debt is "safe" as seen by Figure 1.
And since it has worked once, in the eyes of central planners it should work again, until it fails. Which it naturally will, just like the first LTRO iteration from 2008. But first, it will be expanded to a very ludicrous level, which will lead to the one outcome that Germany wants more than any other - send the euro plunging (remember - the primary correlation of 2012 is the ratio of ECB to FED assets), at least until the Fed steps right back into the currency devaluation fray, which it likely will as soon as March. So just how large will the next LTRO be? "Market talk is focusing on an even bigger amount to be borrowed at the next 3-year longer-term refinancing operation (LTRO) due on 29 February. GREED & fear has heard guesstimates of up to €1tn!" That's right - it is possible that in its quanto monetary diarrhea (but at least it's not printing, so the Bundesbank will be delighted), the ECB is about to increase its balance sheet from €2.7 trillion to € €3.7 trillion, or a €1.7 trillion ($2.2 trillion) expansion in 8 months! And gold is where again?
Chris Wood explains:
By creating a massive incentive for European banks to buy their government’s debt issuance up to three years maturity, the new ECB leader Mario Draghi is clearly seeking to get control over the direction of Eurozone government bond yields. The dramatic decline in Eurozone bond yields up to three years suggests he is getting some traction (see Figure 1). It is also the case that absolute-return investors may be tempted to “front run” coming bond auctions if they think the ECB policy is working. On this point, market talk is focusing on an even bigger amount to be borrowed at the next 3-year longer-term refinancing operation (LTRO) due on 29 February. GREED & fear has heard guesstimates of up to €1tn!
The result is an exploding balance sheet controlled, of course, by an ex-Goldmanite, which can only be halted by Germany, but why when the EUR is crashing, keeping the German export economy vibrant.
True, the above upbeat mood can be undermined in a second by a word from Berlin indicating that Germany does not approve of Draghi’s only too evident easing intentions. It is also the case that criticism is already coming from Germany about the latest draft of the fiscal compact which contains a derisory lack of “teeth” in terms of actual measures to enforce good fiscal behaviour. Still Draghi’s responsibility is monetary policy not fiscal policy. And based on GREED & fear’s observations thus far, it is clear that former investment banker Draghi is a smooth if not slick operator who is adept at saying one thing and doing another. He will also understand that the goal of monetary easing will be undermined if it arouses German opposition. For that reason investors should assume for now that he will have the political skills to keep the Germans onside. Meanwhile, for the moment it is politically correct in Berlin to keep the banking system liquid via ECB extension of credit courtesy of dramatically relaxed collateral standards, even if it is not yet “PC” to monetise Eurozone government debt outright.
The resulting backdoor quanto easing in Eurozone is clear from the recent surge in the ECB’s balance sheet relative to the Fed’s. Thus, the ECB’s total assets have risen by 38% from €1.94tn on 1 July 2011 to €2.69tn on 6 January 2012. While the Fed’s total assets have risen by only 1% from US$2.87tn to US$2.9tn since July 2011 (see Figure 2).
Conclusions?
There are two investment conclusions to draw from this. First, investors should assume a continuing weakening in the euro. On this point, one of the key developments so far this year is a decoupling of the euro from risk currencies such as the Aussie dollar (see Figure 3). Second, the likelihood of a significant weakening in the euro creates the clear potential for European stock markets to outperform the S&P500 this year, given the benefits to European exporters of a weaker currency. Meanwhile, one reason GREED & fear is convinced the euro will head lower is based on the view that Draghi will be quite ready to cut rates to zero if inflation data in Europe can justify such easing. Right now the money markets are discounting only a 25bp cut this year.
Clearly, all of the above does not mean that Eurozone crisis is over. There are plenty of potential landmines, for example the continuing negotiation on the Greek debt restructuring. GREED & fear also still believes that market pressure will ultimately force a more concrete fiscal union as a quid pro quo for more outright monetisation. Still with the highly flexible Draghi at the helm, and with the usual want-to-be-bullish New Year sentiment, it is too risky to keep on the recommended hedge since the risk at this juncture is all of the gains made are wiped out by a violent bear market rally.
More importantly to fans of sound currency, the bottom line is that between the ECB (assuming it does proceed with a €1 trillion LTRO), and the Fed (assuming it does go ahead and launch a $600 billion minimum (and as much as $1 trillion) QE3 as every bank expects by June), the global balance sheet will have increased by nearly $3 trillion since July, even as gold has actually declined in price. And if anyone needs the final clue as to what is going on, an increase in the US debt ceiling to $16.4 trillion which is expected to pass imminently, would mean that by simple correlation a fair value for the yellow metal would be just under $2000 per ounce.
So going back to the first paragraph: "And gold is where again?"
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Far as Im concerned this whole story is damage control counter balancing the days actual horrible news. At least we now know why Europe mass downgrades resulted in a 1% Europe up day....everyone of course expects more free money! Bunch of nonsense.
In the end...Gold north of $5000...Silver North of $150
And that's if things don't get really crazy...
Dow/Gold Ratio less than 5 for sure...Most likely 3 or less for a while...
HUI, easily over a 1000-1200...Probably 1750-2000...with the pedigree stocks up 5-10 fold from here...Some juniors 20-50 fold a few even more...
Just following the metals bull market until it goes Kaboom
load up on liquidity and freeze the market. Impose Zirp yields on ALL Euro sovereigns and at that price ONLY sell to your own institutionals and you are home and dry. As every other central bank is floating in fiat, who cares!
In the new norm BBB will be worth AAA of yesterday and 1T of debt will be requalified in terms of the new new basket of currencies as equivalent to 100B.
There, everybody takes a haircut, we will all look like Elvis when he was singing jail house rock in Germany.
After Lorenzo the magnificent, meet Mario the magnanimus. To be followed by Draghi the unstoppable. To be followed by Il DUce the infallible. To be followed by...well, they did burn the Reichstag last time, they could do it again to that bank in Frankfurt. When the Euro goes viral and reichmarkishmallow.
I doubt when this fiasco ends...We even have the AAA-BBB metrics...
More like having glowing-beeping-blinking gems in our hand or forehead...Telling us whether we live or die...Sarc
This scheme has one shockingly huge flaw. If PIIGS are going to borrow a trillion euros for three years they will have to pay back a trilion euros in three years. It is like paying one credit card bill with another credit card. This is what madoff did.
Pure Crackheadonomics.
But hey, as long as futures are GREEN, thats all that really matters anyway, right? And if futures are not green, float another little rumor about more free money will fix that problem! Entire world economic system FIXED!
no, we'll be taxed to shit, and made to pay, pay, pay! stupid we are, for actually paying taxes at all, screw 'em! those bastard globalists never paid any form of taxes! but they do have necks!
If you replace every acronym with "bullshit" it makes a lot more sense.
ECB..Fed conversation.
Fed: we will print to Euro/USD 1.25
ECB: we will print to Euro/USD 1.20
Fed : we will print to Euro/USD 1.25
Fed/ECB: if we take turns the sheeple won't guess that we are walking our currencies down the road to perdition together.
Ding-Ding-Ding-Ding-Ding-Ding-Ding-Ding...................
Lets get one thing straight. Stocks may take off if the ECB prints but commodities will REALLY take off and that my friend is when this whole charade falls apart. Can you imagine what $175 plus for a barrel of oil would do for the world's economies? My bet is it's not going to be very good. If it were the ECB would have been already started printing.
Fuck this jewish counterfeiting scheme.
Let the idiots earn/save/spend the 40% of the judefetzen they are allowed to keep, and let them think they "own" their houses and land.
Generational wealth will be made owning physical PMs. End of story.
So ... let's see. Draghi's monetary policy easing is going to buy Europe some time for them to get their shit together.
They need a fiscal union and a stringent energy conservation policy. What will the EU do?
Nuttin' honey!
Now that the problem is fixed, everyone can go back to the same idiocy that got them in hot water in the first place! "Tomorrow will take care of itself, right? Dolce fucking Vita! Gimme that coke!"
ECB/Fed/BoJ/PBOC are last line of defense. There is nothing else. WHEN (not if) the central banks fail -- which is something they themselves cannot control -- there will be big problems.
the other way there would be also http://en.wikipedia.org/wiki/Heinrich_Br%C3%BCning,
unless you like yourself being bombed down (but at least they did not have a housing problem after 45)
The European bankers are being led down the primrose path: wake up fellas you're being invited to dinner and you're on the menu.
I love the thought of Banker's roast, on a spit, like a hog or a wild boar; on a skewer aligned with a whole bunch of them strung out like juicy pieces of red raw meat, feeling the roaring heat. Served with moutard de Dijon. And marinated onions in oyster sauce. This has to be accompanied with a Cheval Blanc from St Emilion.
As for primrose path, its the road that leads to that BBQ; for the 99% party of occupy WS stalwarts who were front line protesters and deserve their Chinese new year bonuses; what a home coming.
Off topic but Glenn Beck just quoted zerohedge.com on a pice he hid on the loss of democarcy in Italy and the restriction on cash withdawls from banks.
He followed this up with a good pice on MF Global and how small investors were shafted as there money was consigned to to JPM and GS.
This is the Glenn Beck TV which braodcast over the internet gbtv.com, it is not a braodcast, cable or satellite distribution.
Kudos to zerohedge and Glenn Beck.
We're all Europeans now......./SARC !!!!!!!
Anyways F*ck Europe watching Asia for clues of their meltdown. China GDP will be out (fudged of course). But they sell stocks and buy USDs again, like they have been doing....
doomsday baby.
How long until the Bernank does the european?
http://www.youtube.com/watch?v=JlWTJt4AZTU
Also, I need a small loan to cover some back taxes - Mario?
Like all junkies, they need more and more. They wil continue to live in denial until reality asserts itself. Either they kick the addiction, or they perish along with the global economy.
How big will the final hit of fiat be?
Who knows, but you can bet the junkies will never have enough.
European banks are facing higher capital requirements, meaning they need to deposit more money with the ECB.
If the ECB knows that European banks are going to need to deposit (for example) an extra 1 trillion euros in the ECB, then it can safely print an extra 1 trillion euros to replace the 1 trillion euros the banks are going to remove from circulation.
But once the European banks have met their new, tighter capital requirements it is no longer safe to print. This means that there is a limit to the amount of LTRO money that the ECB can inject without causing inflation. And this limit is a lot lower than the total indebtedness of the PIIGS nations.
So I think that LTRO will have to stop fairly soon (probably before the end of 2012) and when it does, pressure on PIIGS debt will resume.
EDIT: When I say LTRO will "stop", I don't mean that it will completely end. They will continue to roll over existing LTRO loans to keep the total amount of printed money constant. "Stop" means that the amount of LTRO money will stop increasing.
now is ze time on Sprockets vhen ve dance!
http://www.youtube.com/watch?v=QHZR9SA5pOg
the global balance sheet will have increased by nearly $3 trillion since July
"O brave new world that has such people in it." - Huxley
It's pretty hard to juxtapose the " Just say Nein" post with the "Euro 1Trillion" post. Tyler get a grip here and quit jerking us around with headlines.
From the movie, IGOR (<= recommended, unlike my previous suggestion ‘;-)
~//~
I can see clearly now the rain has gone
I can see all obstacles in my way
Gone are the dark clouds that had me blind
It’s going to be a bright, bright sunshiny day
It’s going to be a bright, bright sunshiny day
It’s going to be a bright, bright sunshiny day
nice song. Jonny Nash or Jimmy Cliff? which version...Maybe Bob Marley, like this :
http://www.youtube.com/watch?v=jGqrvn3q1oo&feature=related
I would like to alert ZeroHedge contributors JS Kim and "Turd Ferguson", among others, as well as all the readers here, to the vehement and disgusting anti-silver, anti-ZeroHedge propaganda being disseminated by the Jon Nadler of silver himself, blogger and CME/JPM/Jeffrey Christian apologist (and former occasional ZH poster) "Kid Dynamite", as well as Brian O'Flanaghan and several others, on their website "Screwtape Files". After reading several blog entries and associated responses there, I felt like the need for a shower, so soiled with dishonest, malicious, anti-PM propaganda had I inadvertently become.
Mr. Kim, you may be interested in some of the vile and malicious aspersions cast against you by those silver-hating trolls, in which you are accused of, among other things, having bribed Tyler Durden to post your supposedly self-serving articles here on ZeroHedge.
For those with a strong stomach, or who have previously been at least partially inoculated against vicious anti-PM propaganda via having previously read Jon Nadler's trash, here is their latest piece of lies and filth:
"Is someone paying Zero Hedge to post propaganda?"
http://screwtapefiles.blogspot.com/2012/01/is-someone-paying-zero-hedge-...
Most of us already know better about those particular douchebags akak, but thanks for the info/link.
Edit: that link isn't working. No worries, just propaganda anyway.
Thanks BoP --- I didn't know how widely the reputation of these Nadler clones had spread, but I have seen and read of them here and there online over the past two or three years, and the depths of their vicious dishonesty and malignant hatred for ANYONE who publicly speaks out against the corruption and criminality inherent in the PM markets, as well as for anyone who similarly publicly advocates for the ownership of physical PMs in this time of financial and monetary chaos, simply cries out to be revealed and highlighted to those seeking the truth as opposed to simply more self-serving pro-Establishment propaganda.
I believe these trolls such as Kid Dynamite, Brian O'Flanagan and that disingenuous Bron Sucheki from the Perth Mint are merely tools for the financial (and perhaps political) powers-that-be, always desperately crusading to steer individual savers and investors AWAY from the physical precious metals, and INTO paper ponzi schemes managed by the financial oligarchy, as well as constantly defending the obviously corrupt and fractionally-reserved paper PM markets, always trying to convince us that "All is well" with the COMEX and in the CME, and that "this is not the corrupt and manipulated paper market you are looking for". This intent of theirs is abundantly obvious once one has read enough of their misleading disinformation on gold and silver.
PS: Here is the link again, although the first one (above) is working fine for me:
http://screwtapefiles.blogspot.com/2012/01/is-someone-paying-zero-hedge-...
They must have blocked me from the site. LOL...
I happen to think the ETF's are total frauds as well (SLV and GLD). The evidence certainly points in that direction.
It'll be interesting to see if I happen to get blocked from that site as well --- not that I am overeager to visit that damned den of snakes again anytime soon.
I'm pleased to inform you that you have not been blocked from the site, nor has anyone else. There have been some technical problems with Blogspot since it changed to a threaded replies system, however. Your comments will be welcome, as will anyone elses.
It Depends on what the meaning of the word is is (0:05)
Everything is propaganda. We are humans, thus reality tends to be what we believe, or what we are told to believe. At the end of the day some propaganda is "right", meaning more chose to believe it, thus becoming reality. Now if I were to consider funny money propaganda vs. gold as a store of value propaganda, I have to say the gold crowd has be right for 6000+ years, so I'll stick to that.
I must disagree with you on your first point.
No, NOT everything is "propaganda". There is the truth, or at least honest information disseminated in the best interests of those to whom it is intended, and then there are misleading, deceptive, malicious half-truths and lies which are designed to further the agendas and/or best interests of those who propagate them while simultaneously undermining or working against the best interests of those to whom they are spread--- it is the latter to which I refer as "propaganda".
The specious rationales used to justify the US invasion of Iraq, the manipulated and patently untruthful government statistics published by the BLS such as the publicly reported unemployment and inflation rates, the campaign waged by such people as Jon Nadler and those mentioned above to steer investors and savers away from holding physical precious metals, and to steer them into the financial establishment's paper ponzi traps such as SLV and GLD instead --- these are all blatant examples of "propaganda".
Almost looks like an attempt to pump, runup EUR/USD by spreading fear in shorts to drive Euro higher and thus running /GC up..
Did Tyler turn to the dark side??
Hmmm...
Atak: "so soiled with dishonest, malicious, anti-PM propaganda had I inadvertently become"
Really? I mean, really? The overwhelming majority of articles at the site are positive about gold and silver as investments, and most of the contributors are long on both metals (I certainly am). Look at the latest post, for example, which is extremely bullish about gold: http://screwtapefiles.blogspot.com/2012/01/rsi-gold-corrections.html
It is true that we question the many memes pumped out on to the web about silver, and question the motives of those who are doing so. But that is because we are not prepared to blindly accept demonstrably disprovable 'facts' that are pushed on us. We do the same for MSM memes too. So that does not make us shills for either the silver haters or the silver promoters.
It makes us objective.
lol...
you might want broaden your reading material.
Have to say, VELOCITY a key player in this game. Often overlooked in general xflation commentary.
(There is a sexual metaphor/analog that could be used here, but I don't have the balls to say it.)
Or do I?
I'm sorry for posting so off topic but this is one of the funnier videos I've seen in a long time and if you're up for a laugh you need to watch it.
http://www.youtube.com/watch?feature=player_embedded&v=wQUzapAzIac
Doesn't that cop know his rights????
well thank you!
Universal time tested axiom: If cops requests/orders not followed... they freak. Cops hate it when they don't have full control.
He got so mad he refused to give him back his license.
I think that cop was looking for some weed to confiscate for personal use.
Amything to get him off that ROID RAGE!!! sheesh, get that pig some dope!
its a prank google st marys police prank.
right answer from the driver though
from the sounds of it, maybe he needed some... to chill the F out...
It would make sense if the ECB is willing to print that they would at the same time force Greece out of the EU. If Greece stays and they print no country will enforce austerity and not a damn thing will be any different other than the timeline for the implosion.
Draghi could care less about austerity. He wants to help his Italian buddies and he's printing like crazy. With yields down, all austerity moves will be reversed and we'll be back to where we started.
The problem with printing is that once you start it, you're pretty much all-in and it grows exponentially. You start out with 400 Billion, then go to a Trillion in two months, and soon enough you’re printing 5 Trillion per month just to keep the sovereigns afloat.
ze hyperzinflation vill not hepen
ha ha, a trill here, a trill there, grillz for everyone, smile!
http://www.youtube.com/watch?v=xko1ydSywEw
reed/////OT
Fred and his beloved will be on travel in Morocco and suchlike diabolic climes until February1, when his seditions nonsense will resume. Links to Kindle editions of books are temporarily screwedup, but will eventuall be fixed..
Vote? Why? What candidate in the quadiennial resurrection of the Mickey Mouse club wants to do anthing that I want done?
I want to roll back the onrushing police state and return to constitutional government. The plunge into totalitarianism is a far worse danger than World War Two, in which the US was never in danger of being invaded, and in which the outcome was a foregone conclusion. Who do I vote for? No candidate (except Ron Paul: ERP) is against sovietization.
I want to end our stupid wars, now. Yesterday. Who do I vote for? There is no anti'war candidate (ERP). Obama sends the troops anywhere he can think of, and all the Republicans want to attack Iran.
I want to reduce the military by half and end the militarization of the country that is bankrupting us. Who do I vote for? (ERP)
I want to reduce the size of government, get rid of the departments of Educationh, Housing and Urban Development, and Commerce, toss the Bureau of Indian Affairs, and so on. What candidate wants to do these things? Republicans talk a good show, but which of them actually wants to cut?
I want to end affirmative action, which means governmental favor for some citizens over others, and rely on merit. No candidate speaks of this. Who do I vote for?
I want to end the empire, quit meddling in the business of other countries, get out of South Korea, Japan, and NATO. I don't want to be the world's mommy. Who do I vote for?
I want to reform America's dysfunctional system of taxation, go to a sales tax or flat tax or value-added tax, anything to get IRS off our backs. It isn't the amount of taxation that I dislike, but the intrusiveness, mystery, complexity, and lack of recourse. Who do I vote for?
I want to reform the public schools, outlaw teachers unions, requires decent GRE scores from teachers, cut the propaganda and outlaw drugging of students. Who do I vote for?
Why vote at all? Nothing of substance is on the table, other than the desire of Republicans to attack Iran. Yes, we must get America back on track, get it going again in the right direction, turn the country around, get back to the American values that made the nation great, promote the American Dream—none of which means anything. We must creatr jobs (how?), get America back to work (how?), and favor all the vague platitudes intended to mulct fools. All right, I hereby declare myself mulcted. So why vote?
The elections are supposed to indicate the presence of democracy, but they do not. Elections do not determine policy but only the division of spoils. An election in which candidates take no positions becomes a high-school popularity contest. The way to have elections without having a democracy is to let the people vote, but not on anything.
And oh god, the boredom. Night after night, day after day, we will have this version of Dancing with the Stars, the judges in the media solemnly that Santorum displayed Confidence, but Gingrich committed some trivial gaffe or other. Nuance, gesture, composure, but no substance.
Where is this going? The country is in grave difficulties and needs desperately to make hard decisions. Those in power seem to have decided to keep picking the nation's bones while the corpse slides towards the precipice. Cosset the morons, assure everyone of everything, avoid the issues and do nothing that might upset anyone. Greece, Spain, Ireland all take unpopular measures to try to bring things under control. The US? It spends on, wars on, as if the gravy days of 1960 had never ended.
Having a one'party system called by two names is a technically slick way of disenfranchising the public without their noticing. In a parliamentary system all manner of politics would gain expression in proportion to their prevalence in the population. With two identical parties, no dissenting view can ever gain office. A masterly dodge, this.
Over the years I have read or listened to many men rattling on about this and that arraangement of matters human, socialism, capitalism, republics, direct democracy, fascism, militarism, all the gang. What the theorists all seem to overlook is the irresistable buoyancy of excrement. Communism, theocracy, the divine right of kings, all eventually fall into the hands of the crafty and unscrupulous. If they don't, it is only because they haven't gotten around to it.
It has to happen. Once society becomes more complex than a modest tribe or small town, once its affairs extend beyond the immediate visual horizon of the citizens, they become clueless. Most don't have the brains, and almost none the time or interest, to monitor sprawling bureacracies and distant wars. Villains thrive in the shadows.
Vote? You can choose between Gingrich and Gingrich, between Santorum and Santoru, or between Gingrich and Santorum which is the same choice, or you can choose Romney, who is both Santorum and Gingrich. Such a deal.
When Senator Abraham Ribicoff of Connecticut called on Mayor Richard Daley to halt the “Gestapo tactics,” Daley responded (in full view of news cameras): “Fuck you, you Jew son of a bitch. You lousy motherfucker!” After the convention, Thompson wrote a forlorn letter on September 22, thanking Ribicoff for being “a bedrock of decency” and opined:
“I went to Chicago to research a part of a book on the ‘The Death of the American Dream,’ and needless to say my trip was a rotten success.” -Hunter Tompson, August 1968
http://www.youtube.com/watch?v=-io-kZKl_BI
+1; a keeper.
So what I'm wondering lately is how the ratings agencies recently found religion...history will show they slept during the first few years of this economic crisis...and now...while not exactly ahead of the curve..at least they are doing a limited amount of due diligence...so why now? are they part of the game?...I would assume so but would love to hear more on the subject from all the astute posters here.
S&P is the only one acting all grown up. Fitch and Moodys still have their heads ... well you know the rest.
Hmmmm.... I need to get some gold I guess. Not to change the subject, but I am going to change the subject a bit. I just discovered that the counties file their liens via UCC filings. So does the IRS. These imposter bastards are opperating in commerce. If they file UCC, they are bond by UCC. Read the UCC and live by it! This is fact, not speculation! Just saying.
Asia will open in the green. Europe will rally off Asia. US will rally off Europe. Seems like a nice loop.
As the years go by Zero Hedge looks more and more like a girlie site. ZH along with the old man Bill Gross. Pick up the whole web page and drop it down in Taiwain, Manila or Chiangmai and get out of the world of Big Money because it's not even paper anymore just numbers and charts.
Ty, shake it the fuck up. Do something different.
What is this Euro charade suppose to distract us from? There is something else important going on.
A trillion in LTRO this winter? Germany would leave the euro and take the industrial core in the north if that was even whispered. The Germans just warned the ECB that any printing was out of the question, Sarkozy is already toast, Merkel hanging by a thread. I say that if the euro lasts till April 1 it would be a miracle.
Germany has to play ball or lose markets. Take your pick. Until the "responsible" Nordic countires get into the habit of spending recklessly like their Anglo cousins, they NEED other markets to export, including their profligate neighbors to the south. I dare them to bring back the Mark. And then try selling Beemers and Benzes at that exchange rate.
this clears the way for qe n+1 at the fed. yipeee! let the good times roll! happy days are here again! the sky is the limit! full steam ahead! up up and away!
Draghi is a smooth operator indeed,
Even Sade agress.
http://www.youtube.com/watch?v=4TYv2PhG89A
No F&cking Way! Are you kidding me? Who's got the bigger balls? The taxpayers DIE!
Ron Paul needs to head the FED or the IMF, screw the presidency.
China fudge is in...
oil/gold bid, risk is bid
central planners go for broke.
Better start pulling something outta their asses soon and give the players a chance to hide their game.
Even Canada is getting into it via http://silverdoctors.blogspot.com/2012/01/barret-capital-management-accused-of.html
Barret Capital Management accused of using client cash for its own purposes
http://www.canadianbusiness.com/article/66119--barret-capital-management-accused-of-using-client-cash-for-its-own-purposes
Schrute Bucks (or Stanley Nickels) have to be worth more than the US Dollar or Euro, they just gotta be right???
lol eveything is rallying except for China and they put out the GDP fudged stats!
bulltrap.
Long gold?
Don't think this is happening with Germans within EU and incongruent with talk of widespread austerity measures
What are the banks going to do with the money? Deposit it again with ECB? This is the central problem. Banks have no place to put the money with an economy in doldrums!
As US learned, giving money to bankers does not do anything for the economy. You want velocity and leverage if you want to inflate, you must bypass the banks and figure out a way to pass it to consumers.
Maybe a one year tax holiday for all earnings below $100k for 2011 would work....
What are the banks going to do with the money? Deposit it again with ECB? This is the central problem. Banks have no place to put the money with an economy in doldrums!
As US learned, giving money to bankers does not do anything for the economy. You want velocity and leverage if you want to inflate, you must bypass the banks and figure out a way to pass it to consumers.
Maybe a one year tax holiday for all earnings below $100k for 2011 would work....
************
I doubt Bernanke learned anything-his policy so far has been-
If the banks wont lend and people wont borrow-throw more money at it-until they do-
Problem is like you say-until we can get our sweaty little hands on that cash-she's a no go for an inflationary climate-
Check out the Dow futures! Its like the markets are stuck on a Macco commercial, downgrades? with expanded LTRO and FED printing "its like it never happened." risk on! Man am I getting tired of waiting for some of these banksters/technocrats to get kicked in the butt.
Markets are betting the tipping over of the EU will force the hand of the printers....the TPBT will NEVER
willingly slit their own throats and so they must print NOW.
Doesn't matter. Fed's balance sheet is around $10 trillion everything added in. Fed's still the bigger printer.
Tyler,
On many other sites ZeroHedge is being accused of pumping Gold/Silver, getting paid to do that.
Is that true? I have found your website to be very useful, but it was back then about 2 years ago.
Lately I am seeing surprisingly one sided and bordering on advertizing kindof articles, feels like I am watching CNBC where they used to pump and dump or run something as a shill for some hedge fund or some merchent to server their commerce.
I hope its not true..
Regards,
Hk.
Is Euro/USD being pumped as well to drive the Gold prices higher?
"quanto monetary diarrhea"
- $1 trill for t-shirt rights
ECB is just doing what the BOJ, BOE and FED is doing only more subtly but the aim is the same: buy some more time until the can hits the wall. Note that he Germans are on the same boat : the protests of Merkel and co are just smoke and mirrors to soothe the electorate. They know very well they can't abandon ship without the risk of drowning.
an interesting take by blogger on BI :
According to him US debt mountain will NOT create hyperinflation...Fractional reserve banking is not creating hyperinflation...
A Graphical Representation Of Bernanke's Efforts To Stimulate Bank Lending Mike "Mish" Shedlock, Global Economic Trend Analysis | Jan. 17, 2012, 6:00 AM | http://static5.businessinsider.com/assets/images/icons/icons.png); background-attachment: initial; background-origin: initial; background-clip: initial; background-color: initial; color: #999999; background-position: 0px 0px; background-repeat: no-repeat no-repeat;" title="views">7 |Read more: http://globaleconomicanalysis.blogspot.com/2012/01/graphical-representations-of-bernankes.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+MishsGlobalEconomicTrendAnalysis+%28Mish%27s+Global+Economic+Trend+Analysis%29#ixzz1jiG5PXN3
Loving all these acronyms.
I'm waiting for some more brazen ones like
FLEE (Financial Lords Emergency Escape)
ENRICH (European Nobility Retiring In Carribean Hotel)
etc
Lets be honest with each other, when drahgi was made the man in charge you already knoew the outcome. that was what surprised me about the germans. it shows they may be saying one thing, but really doing another behind closed doors. act outraged at the italianj doing the things hntey want, but can't get away with because of electorla pressure. To make a goldman man head of the ecb, is the same as putting hitler in charge of the courts. fox guarding the hen house, sbsolutely no other rational wqay to explain how this happened. cemented wall street control over the european system as well as the us system.
THRILLIONS - YES!!
Order in the court!
Yes there will be many new definitions of QE but the euro versus dollar is now game on - a race to print more around the world is in progess - and Germany will, indeed MUST, buy into this to keep its exports rolling as will any country making a widget.
To me, this is the first real clear flash forward to the end game - the sovereigns printing like madmen to hold onto their own worthless cash, er trade balances, from a destitute consumer who is well on his way to be being buried alive.
It is money versus money now. Nothing else matters.Everything will go down the tubes. Gold may not see the light of day anymore than any other commodity ever again - the little people will buy it because it makes sense, but the bigs will see to it that nothing has value if not their fiat currencies. How long do the bigs have before their suicide pact, er creative destruction, like Armageddon itself, plays out to the end? A few more years? A few years to the bigs, the central planners, well right now, that is a lifetime.
How anyone can say LTRO is not printing is beyond me. Where does the fed get the money to give to the ECB in the first place, they invent it! That is the crux of the problem, the source of these funds is an illusion from the start. Do you really think the ECB has the money to swap with the fed, no they invent it too. They then give this fake money to insolventment banks in return for junk bonds, I'll ask again how the hell is that not printing! As for the velocity of money not increasing, of course its bloody increasing M1, M2, M3 whatever you want to call it, if it wasn't for these fraudulent LTRO scheme this money would be tide up in eurobank garbage bonds or whatever else they hold on their books.
Brian Williams on CNBC saying that there is only $3.3 billion total CDS exposure in Greece.
*cough*
Hey Brian!
http://www.zerohedge.com/news/how-us-banks-are-lying-about-their-europea...