It may not come at Jackson Hole on Friday, but massive and unprecedented QE is coming, of that you can be assured.
European sources are stating that the fact that Draghi cancelled his appearance at J- Hole on Friday is an indication that the Euro crisis with Spain is nearing a creshendo, and the ECB will be forced to announce a massive bailout of Spain before the week is out.
QE will continue to INFINITY….AND BEYOND!!! in Europe, the UK, and the US. The only alternative is complete debt collapse.
A Swiss credit source states: “We’re talking very, very big here: this is going to dwarf anything done for Greece, and it is going to make the bank 200% responsible for stopping the collapse”
The regions of Spain don’t come much more affluent than Catalonia. So the depth of Spain’s problem was made brutally clear this morning when the Catalans officially requested the full works – total bailout – hoping to apply for a cool €5.23 billion from Madrid. I understand that Mario Draghi knew about this last Friday, but it isn’t the only thing on his radar.
As The Slog posted two days back, Draghi has been playing a dangerous game of poker with Madrid; it now looks as if – unless he does something big, and soon – his bluff will be called bigtime. So much money was withdrawn from Spanish banks last month, the total overtook anything the EU has seen since Draghi’s ECB began collecting the data some fifteen years ago – before EMU was even a reality.
Although the markets seemed curiously calm in the light of these developments, my good source in the Madrid money markets was sanguine on the subject:
“Our view here is that either Draghi goes nap on solving the problem now, or the euro is history,” he told me, “so there’s no point in panicking just yet. If, however, he hasn’t moved by say Friday, well, people will get edgy. If he’d gone to Jackson Hole, we’d all have gotten very edgy.”
In fact, it turns out that the entire executive board of the ECB has cried off the Wyoming jolly. So something is very clearly afoot
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Where would Super Mario find this new treasure? The Bernanke? Pick a pocket or two? Is not the ECB prohibited from QE by law?
I think it’s funny that even though it’s not the same Jackson, the Fed chooses to have their meetings in a place that shares a name with probably the greatest central bank buster in history – Andrew Jackson. They must’ve been laughing when they put his face on the $20 bill. He must be rotating in his grave at high RPM having his image smeared on bankster fiat.
Spain’s banks are in full bank run with $96 billiion exiting the system in the last month. This hemmorage will deplete half the bank capital by year end. Game over without a trillion in new funds to fill the banks
Spainards are forming time banks to barter services based on hours worth of skills, traded amongst the unemployeados. Catalonia is the lastest to come with a begging bowl for $5 billion.
@AGXIIK Question for you…What is to stop a sovereign central bank from creating a foreign cuurency in their computer? Example would be how the Fed and the ECB enter into a currency swap arrangement. Why does the ECB need to do that? I mean they are criminals to begin with so why not credit their own account with dollars and use those dollars to pay the bills so to say. You and I can’t do that because the bank controls our account. But, a central bank or a government has no such controls on it. Couldn’t a central bank just credit their house account with any currency? It’s all just one computer talking to another computer. It’s easy enough to tell if printed currency is conterfeit. But, how do you tell if computer money is legit? Governments go to great pains to create bonds and then have a central bank fund those bonds. Why couldn’t the U.S. Treasury just create dollars on their own computer? Who would know? It’s not like anyone audits the Fed.
Anyone who believes that quantitative fleecing will bring anything to the republic but more pain and currency debasement isn’t paying attention. Those who are paying attention are buying or will be buying gold and/or silver. Since there is no end in sight to any of the above, I feel confident that I/we are doing the right thing by stacking. The writing is on the wall for those who can read. How great it would be to have Ron Paul give it a go. He seems to be the only one who has rightly predicted current events, and continues to call for the sanity we need in this country right now. Oh well, Mittrack Obamney will solve our fiscal crisis, that’s for sure!
Is it me or do those higher metal prices and reduction of the gold/silver ratio seem to be getting closer and closer. Throwing another Trillion+ on hot fire is really going to fan the flames. Why can only a few understand the ramifications of this madness? I’m convinced that most of the population has lost the remaining of their common sense. Mr. Murphy said some big changes were coming and I certainly believe him. And another conservative estimate is $5,000 gold by 2018.
With the amount of fiat currency floating in the world economy it is going to take extraordinary gold and silver prices to get these flames under control. The European and Asian banks know it and are buying by the tons of available inventory. America supposedly has 8,000+ tons of gold (assuming it is still there) and import silver to make our ASEs. China knows they are not going to get paid back as they also see what is happening.
To place some kind of reserve in place for a $16 Trillion US debt would require gold prices of $18,357/oz to cover just 30% of the debt. Now say G/S ratio comes down to 15 and silver is $1,224/oz of which we have none. While these senior officials firmly believe in their fiat ways and count on it to control everything we do, they have to be thinking about this. Somebody has to be saying — We have to get some kind of handle on this or it’s lights out! Now granted they don’t want any stackers to have that kind of coin but the writing is pretty much on the wall — the gov’t and bankers are broke and the system isn’t functioning and volume is falling fast. Some sanity has to eventually enter the picture or there will be biblical suffering and it just won’t be the common people.
Am I off my rocker or does anyone else think the people in charge will simply say — Alex, Biblical Suffering for $1,000???
“The only alternative is complete debt collapse.”
The only alternative is still an alternative. Don’t think they wouldn’t. They’ve done it before.
I can’t see the outcome clearly.
A big injection of Euro via ECB bondbuying should devalue the Euro, which should strengthen the dollar, which is bad for all assets including the PM’s.
But another view would be that this huge Euro bondbuying would calm markets that the Euro problem is over, and that this would trigger a worldwide “risk on” environment where all assets rise, PM’s included.
Which outcome is likely?
The collapse of the Euro must happen and will happen. It must happen because people are having hard time getting cash to live well like before. Pawnshops in Italy shows that more and more people are selling their possessions like gold. It will happen because people can’t live forever by keep borrowing and doing bailouts.
Conclusion: The sooner, the better!
Ugly Dog You bring up a good point of a sovereign central bank creating a foreign currency in their computer, unlike every other currency in the world backed by zero, zip nada LOL Like North Korean manufacturing a very good replica of the US dollar, the ECB could print dollars. But why would they want to put themselves in the same category as NK when they can have us print it for them. And that’s what they did.
More devious action was the LTRO (Long term refinance operations) In this action the ECB desperately needed funds to bail out Greece and recapitalize the EURO BANKS, many of which took major hits when the Greek bonds they held were given a 70% haircut, costing these banks about $200 billion in bond value. The ECB ginned up about $3 trillion in Euro bonds, if my memory serves me, and then shipped them to the Fed as collateral for currency swap. There were actually two tranches of LTRO in about a 6 month time period. The ECB doled out these funds to the banks.
The Spainish and Italian banks immediately bought their own sovereign debt with their shares of these funds. The bonds almost immediately lost value as the interest rates paid by these two countries went up by a few points, reducing their value. The ECB bonds also lost value as collateral due to the continent-wide rate increases, leaving the Fed with much less valuable collateral. It’s like two drunks telling each other that they will stop drinking in the morning and ask someone for a loan to buy more whiskey. Some of the banks were experiencing huge bank runs to they needed a few hundred billion to plug those holes. Much of these LTRO funds were shipped back to the US, kiting up the stock market and being invested in US treasuries, dropping those rates down to about l.5% and set off the ZIRP Fed policy.
In addition, the ECB can’t produce unlimited currency because Germany is keeping a short leash on the hyperinflating Weimar affect of unlimited currency printing. That’s the reason the ECB came to the Fed with their beggiing bowl and Christine LaGarde took her tin cup to the IMF member to get some bailout money. Funny thing is she came back with $450 billion. Some poeple never learn. So the irony here is that each central bank relies of the ability of another sovereign central bank to print up a few trillion while accepting basically worthless collateral backed by the ‘Full faith and credit’ of that bankrupt central government. That will end badly just like the first and second round of Greek bailout funds collateralized by Greek bonds that have dropped, once again, about 70% in value. I guess haircuts are pretty cheap in Greece. It’s just a matter of time before the tens of trillions in faux counterfeit FIAT and bonds both fail badly, with the same overall effect as Greece with its terrible problems.
Allinagau. You hit the nail on the head. The bible was written partly to address the problems caused as a result of the constant debasement of currency, sinful bankers and destruction of entire civilizations by central banks and evil rulers controlled by the money lenders. The Biblical suffering you note was almost always a result of the collapse of those civilizations and the ensuing calamaties that rain down on the people
It seems that the word is “I’ll pretend to give you ’sure to fail’” collateral if your give me counterfeit FIAT has been the cause of more suffering that I can imagine. We seem to be heading in that direction again. Stay safe and stack high