Whatever it takes

Listeners to our weekly wrap radio will be well familiar with the continual news of a struggling Euro zone.  In the midst of the Euro crash their central bank head Mario Draghi famously said:

Within our mandate, the ECB is ready to do whatever it takes to preserve the euro. And believe me, it will be enough.

Since then he has tried zero interest rates, negative interest rates, and free loans but the graph below shows the result.  He has hinted at outright money printing (ala US’s QE, China, Japan and UK) but just says they are ‘preparing’ for it.  We’ve spoken before about money printing and GDP and its worth keeping the graph below in mind before they inevitably start and comparing later.  As Japan, the US and China (and UK to a lesser extent given they went a bit easier on the money printing) have shown, the new money only works for a little while but makes the core issue much much worse, and sets up a bigger crash when that inevitably happens too.  At the risk of sounding like a broken record… you can’t ‘print’ gold and silver…they are REAL money.