Steen Jakobsen, chief economist for Saxo Bank in Denmark has some interesting thoughts to share on gold and metals in an email update that just came in.
Steen writes …
- More QE in both US, UK and Europe including low rates and basically banks funded through 2012
- A forced voluntary deal in Greece – the real test is the next payment three month down the road
- A fiscal compact by next Monday where Germany will declare victory and then allow EFSF/ESM to be merged
- Iran on the back-burner at least for now.
This new hope will stop the move towards the “Endung” – as the ultimate solution remains the same: Germany needs to decide for or against Europe – end of story – they will cave in last day, last minute but only if forced to do so, this more of same pretend-and-extend will delay this from Q1 to Q2 or Q3 meanwhile the balances or rather imbalances inside the system will increase making the ultimate price(loss) yet higher – but why bother with something which is more than one week away? As someone commented today by this time next year most of today’s politicians could be out of office anyway: China, France, Italy, Greece etc…
The story is always the same: Politicians spend money – the private economy tries to keep up. Meanwhile the challenge for us skeptics is best defined by Keynes old comment: ‘The market can stay irrational longer than I can stay solvent’ – and that is the bet Princess Merko-cy is playing when she kissed the frog and got an Italian prince with a huge balance sheet in Frankfurt. A true fairytale it is!