In this week’s Metals & Markets, The Doc & Eric Dubin break down the ECB’s massive €60 billion a month QE announcement Thursday, and discuss whats next for the global markets and gold & silver in particular:
- Gold & silver’s strong January continues with silver $4 off its lows and gold nearly $200 off its December lows
- Cartel setting metals up for a Classic Gold & Silver raid on next week’s options expiry and January FOMC statement!
- Why Fed will soon begin backpedaling on rate hikes, may announce QE4 by Q4!
- Cartel raid likely won’t last- Why gold is likely to rise by 20% at a minimum in 2015- and COULD DOUBLE!
The SD Weekly Metals & Markets With The Doc & Eric Dubin is below:
Mario Draghi and his merry band of central bankers pulled off the launch of a new, mega QE program. Interestingly enough, on Tuesday, the executive board of the ECB leaked that QE would be 50 billion euros per month, but that the target could be changed once the full ECB board met to fix policy on Thursday. After the leak, the euro rose against the dollar during Wednesday’s trading, with the exchange rate shifting to 1.161 from 1.550 on a US market basis.
These central bankers might be whacked-out on QE like a crack addict, but they do know how to set and navigate market expectations. They probably had two options sitting on the table Thursday morning. After seeing the lack-luster response to the leaked target, they opted for the bigger bazooka: 60 billion euros worth of asset buying per month for about 18 months.
Needless to say, building up to this week, euro-land interests have been jumping into gold. I noticed this dynamic starting to take hold back in December, and I asked Alasdair Macleod about it during our round table a few weeks ago. If you missed the roundtable discussion, it’s still highly relevant. Click here to access it.
The big news next week will center on the FOMC meeting. Frankly, don’t expect much different to come out of this meeting other than a tiny bit more emphasis on the growing risk of an economic slowdown/deflation abroad and maybe one sentence about the oil crash and it’s deflationary significance. But I do expect the cartel to keep gold and silver capped, with one or two attempts to blast prices lower. It remains to be seen just how hard they push, but my view is that underlying support from continued strong physical demand will repair whatever damage they are able to generate next week no later than the end of the following week.
Doc and I talk about this on this week’s show, and I also talked about this extensively with Rory over at The Daily Coin on Wednesday, outlining that despite the pending ECB announcement that we’d probably see trading capped and kept within a tight range this week through most of next week, with ineffectual raids sprinkled in for good measure. Rory will have that podcast posted sometime this weekend and we’ll run it at Silver Doctors too.
The mainstream media has been flooded with reports coming out of Davos. Over the weekend, we’ll cover some of the more interesting developments. We can already see that war propaganda is more prominent. Ukraine president Petro Poroshenko attempted to convince the world that 9,000 Russians are fighting on behalf Eastern Ukraine, complete with tanks, heavy artillery, and armored vehicles. This is total bullsh*t, but Western lamestream captured media will dutifully report this with zero historical context concerning the multiple other times Ukraine and the West have attempted to spin similar stories. Click here to read Daniel McAdams take on this latest propaganda salvo.
There are a small number of Russians in Eastern Ukraine fighting along with people from all over the world that have come to take up the cause against fascism. It’s somewhat similar to how many Americans joined the Abraham Lincoln Brigade and went to Spain to fight against the Fascist forces of Francisco Franco. These Russians number in the tens to hundreds, not 9,000. They are not an official force sanctioned by Russia and they most certainly are not bringing tanks and heavy artillery supplied by Russia over the border.
While I’m not in the camp that views major changes to the downside for the US dollar starting in February (which on today’ show and in even greater detail in my discussion with Rory), I do expect to see escalating tensions on the geopolitical front develop in February. There’s a bull market in imperial hubris.
For additional weekend reading/listening, check out:
- Stratfor’s George Friedman Fingers US Complicity For Ukraine Coup D’etat
- Eric Dubin On Swiss Peg Removal, ECB QE, Oil, Precious Metals, Geopolitics & More W/ Jason Burack, Wall St. For Main St.
Have a great weekend — Eric Dubin