Unlcear if as on recent occasions, there will be 7,000 policemen protecting him: Mario Draghi travels to Berlin today to meet with key German parliament members involved in the eurozone crisis policy. This private meeting is the ECB president’s effort to defend his new bond buying plan as a legitimate instrument in its monetary policy arsenal. Germany’s legislative backing is critical for Draghi’s plan to buy up Spanish and other eurozone area government bonds. The Bundesbank president, Jens Weidmann, says the program is tantamount to financing governments by printing money, which is prohibited by the ECB’s founding treaty. ECB presidents normally give evidence to the European parliament but rarely if ever address national legislatures especially behind closed doors. This journey is highly unusual but a critical sell for Draghi. Today’s session will be followed by a press briefing at 4pm local time by Mr. Draghi and Bundestag leader Norbert Lammert.
From Goldcore:
Today’s AM fix was USD 1,708.50, EUR 1,321.04, and GBP 1,069.28 per ounce.
Yesterday’s AM fix was USD 1,717.00, EUR 1,317.22, and GBP 1,072.12 per ounce.
Silver is trading at $31.93/oz, €24.77/oz and £20.02/oz. Platinum is trading at $1,577.25/oz, palladium at $596.70/oz and rhodium at $1,100/oz.
Gold fell $21.60 or 1.25% in New York yesterday and closed at $1,706.90. Silver hit a low as $31.55 and ended finished with a loss of 2.35%.
Gold trimmed gains Wednesday amid worries about the global economy grew and demand from the world’s largest consumer, India helped support prices.
Cross Currency Table – (Bloomberg)
The China HSBC Flash Manufacturing Purchasing Managers Index (PMI) hit a three month high of 49.1 in October, and ramped up its largest order books since April, hinting at signs of a gradual economic recovery.
Investors await the US Fed’s policy statement today at 18:15 GMT but most economists expect no new policy initiatives before the US presidential elections on November 6th. Recent rumours released claim Bernanke has no interest in renewing his 4 year term as Chairman of the US Federal Reserve’s Federal Open Market Committee.
The festival season peak begins next month in India and physical demand is expected to increase.
Spanish government bond prices dropped on Tuesday after Moody’s downgraded five Spanish regions. The news comes just days after more Spanish regions tapped the federal government’s regional bailout fund, effectively depleting the remaining balance of the fund and increasing the need for Spain’s bailout.
Mario Draghi travels to Berlin today to meet with key German parliament members involved in the eurozone crisis policy. This private meeting is the ECB president’s effort to defend his new bond buying plan as a legitimate instrument in its monetary policy arsenal.
Germany’s legislative backing is critical for Draghi’s plan to buy up Spanish and other eurozone area government bonds.
The Bundesbank president, Jens Weidmann, says the program is tantamount to financing governments by printing money, which is prohibited by the ECB’s founding treaty.
ECB presidents normally give evidence to the European parliament but rarely if ever address national legislatures especially behind closed doors. This journey is highly unusual but a critical sell for Draghi. Today’s session will be followed by a press briefing at 4pm local time by Mr. Draghi and Bundestag leader Norbert Lammert.
XAU/EUR 6 Months – (Bloomberg)
The main goal will be to convince lawmakers that the ECB is committed to keeping inflation low.
Draghi’s plan outlines that the ECB will only buy a government’s bonds on the secondary market after it has agreed to economic reform measures set out by the single currency zone’s finance ministers and the IMF.
Although, Weidmann and other German politicians have been vocal in their objections, Chancellor Angela Merkel has backed the plan and asserted that it isn’t outside the central bank’s mandate.
German opposition lies deep in its history when under the Weiman Republic in the 1920’s massive bond buying is widely thought to have triggered hyperinflation.
The 2010 ECB bond buying program that initiated German adversity to ECB policies resulted in then-Bundesbank President Axel Weber and ECB chief economist Juergen Stark, a former Bundesbank vice president, to resign in protest.
In September, when Super Mario unveiled the new bond program, called Outright Monetary Transactions, to replace a prior facility the markets received the news favourably.
The ECB plans to buy bonds only if countries first seek assistance from Europe’s bailout funds and agree to undertake fiscal overhauls or austerity.
The ECB (which wants the International Monetary Fund involved in overseeing compliance ) has said it would cease buying bonds if countries renege on their pledges.
Over the course of the eurozone debt crisis Germany’s parliament has increased its powers requiring the government to seek its approval of any bailout.
German Parliament could throw a spanner into the works if Mario Draghi fails to convince lawmakers that he is operating within the ECB’s mandate and increases speculation that the ECB is propping up state budgets.
“The decisive question is whether the ECB is conducting monetary policy or fiscal policy,” said Carsten Schneider, a financial-policy expert for the main opposition Social Democrats. “If this is financing state budgets, then the Bundestag and the European Parliament will have to decide on it.”
NEWS
Gold pares early gains; holds near 7-week low – Reuters
Gold futures settle at a nearly seven-week low – MarketWatch
Bernanke probably won’t stand for third term at Fed – Reuters
COMMENTARY
Bernanke Seen Attacking Jobless Rate With QE Until His Term Ends – Business Week
Forget Libor, Central Banks Are The Real Market Manipulators: Okada – Forbes
Europe Bank Chief to Defend Bond-Buying Plan – Wall Street Journal
China flash PMI show signs of recovery – The Financial Times
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What to think? lol Is he really meeting them to defend QE or is it all “smoke and mirrors”? I believe it is the latter; it is all “smoke and mirrors” designed to deceive the public, nothing more and nothing less. The Bundesbank for one is not interested in auditing Germany’s gold reserves. In fact, why does the global government pretend that sovereign nations and governments still exist? I think it is time that the Puppet Masters show us at least a pair of balls and stop hiding behind BS.
“ I think it is time that the Puppet Masters show us at least a pair of balls and stop hiding behind BS.”
A lot of us think that but as we all know, TPTB do not care what we think… or want… or need.
All they’re doing in these private meetings, when they don’t have orgies, are to coordinate and plan how they can best screw the citizens of the world over next. They feel so bloody important when they’re dressed in Armani suits and what have you, as if they’re God’s gift to earth, the little gods if I may. These parasites make me absolutely sick to my stomach. I can just hope that the masses will wake up so that we can put them… have a good night’s rest. lol
That’s why I wish the collapse could happen very fast so that no more people are going to suffer from inflation that makes their wages less valuable. I mean why suffer to avoid something that will happen for sure. What are the elites thinking about?
I fully expect that Germany will be the game changer. I met a guy that remembered the Weinmar and I met another that was a child in Dresden. Memory has not faded. The German folks have been beaten down by every form…Communism…Nazi…got Fascist? Western Freedom…European Unionism…What is their true Identity? Teutonic Stoicism. But the long suffering of the Treaty of Versailles gave rise to the nazi fervor. Unspeakable poverty due to England/France “winning” the War. It was just the Banks that called “time out.”
But National Pride must run deep there. I fully expect the German People to get slammed and the word Austerity will bring out the very worst in People. How do you pronounce “tungsten” and “rehypothication” in their native tongue?
To pin it down on the Treaty of Versailles has validity only to some extent… the Nazis stood for positive non-Judeo Christianity as can be seen for one in the 25 point programme of the NSDAP. All 25 points are based on Biblical principals and laws. This is a fact of history that should not be ignored or denied… I won’t be surprised if the German people rise up again.
1. We demand the union of all Germany in a Greater Germany on the basis of the right of national self-determination.
2. We demand equality of rights for the German people in its dealings with other nations, and the revocation of the peace treaties of Versailles and Saint-Germain.
3. We demand land and territory (colonies) to feed our people and to settle our surplus population.
4. Only members of the nation may be citizens of the State. Only those of German blood, whatever be their creed, may be members of the nation. Accordingly, no Jew may be a member of the nation.
5. Non-citizens may live in Germany only as guests and must be subject to laws for aliens.
6. The right to vote on the State’s government and legislation shall be enjoyed by the citizens of the State alone. We demand therefore that all official appointments, of whatever kind, whether in the Reich, in the states or in the smaller localities, shall be held by none but citizens.
We oppose the corrupting parliamentary custom of filling posts merely in accordance with party considerations, and without reference to character or abilities.
7. We demand that the State shall make it its primary duty to provide a livelihood for its citizens. If it should prove impossible to feed the entire population, foreign nationals (non-citizens) must be deported from the Reich.
8. All non-German immigration must be prevented. We demand that all non-Germans who entered Germany after 2 August 1914 shall be required to leave the Reich forthwith.
9. All citizens shall have equal rights and duties.
10. It must be the first duty of every citizen to perform physical or mental work. The activities of the individual must not clash with the general interest, but must proceed within the framework of the community and be for the general good.
We demand therefore:
11. The abolition of incomes unearned by work.
The breaking of the slavery of interest
12. In view of the enormous sacrifices of life and property demanded of a nation by any war, personal enrichment from war must be regarded as a crime against the nation. We demand therefore the ruthless confiscation of all war profits.
13. We demand the nationalization of all businesses which have been formed into corporations (trusts).
14. We demand profit-sharing in large industrial enterprises.
15. We demand the extensive development of insurance for old age.
16. We demand the creation and maintenance of a healthy middle class, the immediate communalizing of big department stores, and their lease at a cheap rate to small traders, and that the utmost consideration shall be shown to all small traders in the placing of State and municiple orders.
17. We demand a land reform suitable to our national requirements, the passing of a law for the expropriation of land for communal purposes without compensation; the abolition of ground rent, and the prohibition of all speculation in land. *
18. We demand the ruthless prosecution of those whose activities are injurious to the common interest. Common criminals, usurers, profiteers, etc., must be punished with death, whatever their creed or race.
19. We demand that Roman Law, which serves a materialistic world order, be replaced by a German common law.
20. The State must consider a thorough reconstruction of our national system of education (with the aim of opening up to every able and hard-working German the possibility of higher education and of thus obtaining advancement). The curricula of all educational establishments must be brought into line with the requirements of practical life. The aim of the school must be to give the pupil, beginning with the first sign of intelligence, a grasp of the nation of the State (through the study of civic affairs). We demand the education of gifted children of poor parents, whatever their class or occupation, at the expense of the State.
21. The State must ensure that the nation’s health standards are raised by protecting mothers and infants, by prohibiting child labor, by promoting physical strength through legislation providing for compulsory gymnastics and sports, and by the extensive support of clubs engaged in the physical training of youth.
22. We demand the abolition of the mercenary army and the foundation of a people’s army.
23. We demand legal warfare on deliberate political mendacity and its dissemination in the press. To facilitate the creation of a German national press we demand:
(a) that all editors of, and contributors to newspapers appearing in the German language must be members of the nation;
(b) that no non-German newspapers may appear without the express permission of the State. They must not be printed in the German language;
(c) that non-Germans shall be prohibited by law from participating financially in or influencing German newspapers, and that the penalty for contravening such a law shall be the suppression of any such newspaper, and the immediate deportation of the non-Germans involved.
The publishing of papers which are not conducive to the national welfare must be forbidden. We demand the legal prosecution of all those tendencies in art and literature which corrupt our national life, and the suppression of cultural events which violate this demand.
24. We demand freedom for all religious denominations in the State, provided they do not threaten its existence not offend the moral feelings of the German race.
The Party, as such, stands for positive Christianity, but does not commit itself to any particular denomination. It combats the Jewish-materialistic spirit within and without us, and is convinced that our nation can achieve permanent health only from within on the basis of the principle: The common interest before self-interest.
25. To put the whole of this programme into effect, we demand the creation of a strong central state power for the Reich; the unconditional authority of the political central Parliament over the entire Reich and its organizations; and the formation of Corporations based on estate and occupation for the purpose of carrying out the general legislation passed by the Reich in the various German states.
I think people are jumping to the wrong conclusion. The situation is probably exactly what it appears to be. Draghi is going to Germany to have a closed door meeting with the people that are going to decided if he has Germany’s support for the plan. And the obvious reason why it is closed door is because material will be presented (and discussed) that is not suitable for public consumption.
Things are so close to ripping apart, Draghi has no choice but to travel to Germany and plead with them to give him some more rope. And if they don’t everything comes unglued very quickly.
Even if he defends his bond buying plan, it will only cause higher inflation which means more euro’s investors are going to flee away from it. Although, I’m still trying to find a private dealer who will accept my lose euro changes because currency exchangers don’t accept coins. :/