The Last Bastion of a Broken Republic is Printing Money


Author Larry Berman

Posted: 28 Feb 2012 reposted from etfcm

Silver broke out while crude is showing some signs of cooling, though nothing that would suggest a breakdown. Gold is lagging a little on the breakout as are gold stocks, but there is clearly some breakout potential on the new tranche of cash the ECB is going to inject into the European banks. It was larger than expected, but so far has not excited the metal (could see a ‘sell the news’ type of reaction today).

We are simply amazed that some very smart portfolio managers in Europe feel that this QE will somehow fix the banks—it’s almost laughable if it were not so sad. To be fair, they are almost all taking the cash, why wouldn’t they, but like we saw with TARP, they do not have to lend it out.

The last bastion of a broken republic is printing money to dig their way out—it would seem that is the MO of all central banks. The good news is that austerity seems to be taken seriously, but the deleveraging process has years to run. The push and pull on commodity prices in the coming years due to the printing presses running overtime will be challenging to navigate.

 

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