Final death throes?

On the eve of the highly anticipated ECB meeting tonight news broke last night from a close ECB source that they will surprise to the upside by announcing a EUR50b per month Quantitative Easing program – printing EUR600b over the year.  This is desperate stuff, the last ditch attempt to revive the Eurozone with a ‘shock and awe’ approach rather than something more moderate.  The implications are very well laid out in this must read article we posted today.  The upshot?  This highly credentialed BIS and OECD expert, who accurately predicted the GFC, says it is too late, won’t work for Euro, and will end badly.  Combined with Canada surprisingly cutting its interest rate to just 0.75% overnight saw some shock go through markets, driving gold up further before the usual opportunistic short sellers came in.  The Canadian move, on the back of falling oil, gives the RBA the perfect excuse, on the back of falling ore, coal and gas, to do the same in Australia.  That will drive down the Aussie further (as the markets pre-empted last night) which will raise AUD gold and silver prices (explained here). The price actions of gold and silver this year are very clear signs that more and more sophisticated money knows we are drawing close to a big correction or crash.  The Swiss National Bank shock last week (a central bank defensive move against the inevitable collapse of the Euro) demonstrated how market shaking events can come without warning, and that was just one little country. That the Euro and Canada are adding to the desperate stimulus and the spiralling global currency wars (forcing down your dollar by printing money and ZIRP to make you more competitive – while everyone else is doing the same) is feeling very much like the final death throes of this unprecedented global economic experiment.  Gold and silver are rising as people flock to the oldest safe haven which, unlike bonds, has no counterparty risk.