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Today’s AM fix was USD 1,774.50, EUR 1,361.44 and
GBP 1,092.54 per ounce.
Yesterday’s AM fix was USD 1,756.75, EUR 1,344.31 and GBP 1,081.81 per
ounce.
Silver is trading at $34.66/oz,
€26.76/oz and £21.48/oz. Platinum is
trading at $1,632.00/oz, palladium at $666.70/oz and rhodium at $1,300/oz.
Gold climbed $13.00 or 0.74% in New York yesterday and
closed at $1,770.60. Silver surged to $35.015 before it also dropped off, but
it finished with a gain of 2.23%.
Mephistopheles: Persuaded the Emperor to Print Paper
Money
Gold hit its highest level in 6-1/2 months today after
Japan followed Europe and the USA in embarking on stimulus measures to boost
its economy, increasing the safe haven’s appeal as an inflation hedge.
The rash of central bank massive liquidity injections
is continuing to support gold as traders bet on the inflationary consequences
of such significant largesse.
The BOJ (Bank of Japan) ramped up its asset buying and
loan programme, by ¥10 trillion ($127 billion)
to ¥80 trillion which led to Japan’s total public debt surging over
the 1 quadrillion mark.
1 quadrillion is a very large number and is
¥1,000,000,000,000,000 or 1 with 15 zeros after it.
Japan could clearly do with their own
Jens Weidmann right now.
The most vocal critic of the ECB’s recent ultra loose monetary policy, Jens Weidmann,
the influential head of the German Bundesbank, has
again attacked current ECB monetary policy.
XAU/EUR Currency – (Bloomberg)
Weidmann has been trenchant in his criticism of EBC
policy but has gone further by analogizing recent monetary stimulus to
"the scene in Faust, when the devil Mephistopheles, 'disguised as a
fool,' convinces an emperor to issue large amounts of paper money."
His criticism has been picked up by media
internationally (see news) and has been featured on the front page of the
Financial Times (UK edition) today including an image of Mephistopheles and
the caption ‘Mephistopheles: Persuaded the Emperor to Print Paper
Money.’
XAU/EUR Currency – (Bloomberg)
As the FT reports today “In early scenes from
Goethe’s tragedy, Mephistopheles persuades the heavily indebted Holy
Roman Emperor to print paper money – notionally backed by gold that had
not yet been mined – to solve an economic crisis, with initially happy
results until more and more money is printed and rampant inflation
ensues.”
The classic play highlighted, Weidmann
argued, “the core problem of today’s paper money-based monetary
policy” and the “potentially dangerous correlation of paper money
creation, state financing and inflation”.
In yesterday’s speech in Frankfurt,
Goethe’s birthplace, he said: “The state in Faust Part Two is
able at first to rid itself of its debts while consumer demand grows strongly
and fuels a strong recovery. But this later develops into inflation and the
monetary system is destroyed by rapid currency depreciation.”
The name Mephistopheles as used by Goethe comes from
the Hebrew word for destroyer or liar.
Mephistopheles is a fallen archangel, one of the 7
great princes of Hell and in Goethe’s ‘Faust.’
Mephistopheles is acting for his overlord Satan and seals the pact with
Faust.
Weidmann is suggesting that the ECB’s current
monetary policies are a Faustian pact or a pact with the Devil and that they
secure short term gain but will end in the disaster of rampant inflation.
Cross Currency Table – (Bloomberg)
The consensus among many experts today, such as Paul Krugman, is that Draghi and
Bernanke are protecting people and economies by their radical monetary
policies. This is the same consensus and many of the same experts who said
there was no risk from the global property and debt bubbles until they blew
up in our face.
It is interesting that many of the same experts who
denied there were property and debt bubbles are often most vehement in
supporting the very central bankers who helped create this crisis and whose
monetary policies of piling debt upon more debt risk worsening the crisis in
the long term.
History will not judge Draghi’s
supporters and Draghi’s stewardship of the
ECB kindly.
Weidmann is right to warn regarding the real and
increasing dangers of inflation and “rapid currency
depreciation”.
For breaking news and commentary on financial markets
and gold, follow us on Twitter.
NEWS
ECB
Bond Buying Likened to Work of the Devil – Financial
Times via CNBC
Gold Advances to Six-Month High After BOJ Steps Up
Stimulus – Business Week
Gold hits 6-1/2-month top, BOJ move extends stimulus
rush - Reuters
Gold’s Heading to $2000, Strategists Say;
Thanks QE3 – Wall Street Journal
Lonmin deal pressures other S.Africa
mining firms - Reuters
COMMENTARY
Could Fed's QE3 Program Send Gold to
$2000?
- Bloomberg
When will gold go back to $1,920 an ounce? – Money Week
New Innovations Boost Silver Demand, But Could Price
be Taken Down Again? – Casey
Research
Tungsten-Filled 10 Oz Gold Bar Found In The Middle
Of Manhattan's Jewelry District – Zero Hedge
Fed Up - GoldSeek
Twenty Four Carat Case For Gold
– Equities.com
Mark
O’Byrne
Goldcore
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