July 26, 2012
By Kevin Michael Grace
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Gold was up (at press time) $38.90 (+2.5%) for the week to $1,619.80, and silver was up $0.32 (+1.2%) to $27.45. GoldCore attributed gold’s increase to “investor hopes for additional stimulus packages to be released by central banks [which] increased the yellow metal’s appeal as an inflation hedge. [This] was on the wave of Ewald Nowotny‘s comments and hopes that the US would employ further action after [the Fed's] policy meeting next week.”
Nowotny proposed giving the European Stability Mechanism a banking licence, an idea that should be a non-starter because it’s, well, illegal. But one suspects we’re about to witness a sea change in European law real soon now.
Perhaps it will be started by European Central Bank supremo Mario Draghi, who declared Thursday, “Within our mandate, the ECB is ready to do whatever it takes to preserve the Euro. And believe me, it will be enough.” Did you feel the frisson? He’s Batman!
Meanwhile, the 17 “wise men” (ie, economists) of the Institute for New Economic Thinking (ie, old economic thinking), which is bankrolled by the sinister George Soros, have issued their own cri de coeur: “We believe that…Europe is sleepwalking toward a disaster of incalculable proportions… The sense of a never-ending crisis, with one domino falling after another, must be reversed.” Their solution? Further fiscal integration, more borrowing from Paulo to pay Pedro.
As we head into the dog days of summer, these epic pronouncements become ever more unreal. According to Wikipedia, the ancient Romans believed the dog days “to be an evil time [when] ‘the Sea boiled, the Wine turned sour, Dogs grew mad, and all other creatures became languid; causing to man, among other diseases, burning fevers, hysterics, and phrensies.’” Their solution? “The Romans sacrificed a brown dog at the beginning of the Dog Days to appease the rage of Sirius, believing that the star was the cause of the hot, sultry weather.”
One suspects that modern Roman Mario Draghi must needs sacrifice more than one brown dog to appease the malign star that persecutes his continent. Greece, Spain, Italy…? The kennel is anxious, and the night air is rent with the hideous sounds of canine shrieks, howls and whimpers.
Continuing our ancient theme, the Daily Mail‘s Mitch Feierstein reminds us of the fate of Cassandra. She “was the daughter of King Priam of Troy. After Helen, she was considered the most beautiful woman on earth… Because of her beauty, the god Apollo fell in love with her and gave her the gift of prophecy. When she did not return his love…he cursed her, ensuring no one would ever believe her prophecies. But Cassandra saw it all coming: the Trojan War, the Trojan Horse, the fall of the city and the slaughter of its citizens…. And no one believed her.
“I’ve said for ages that the Euro will fail, that the countries of the Mediterranean are bankrupt, that Germany doesn’t have the resources to fill the void and that the Western world is entering not a recession but a depression: a huge, 10-year, economic slump. And here we are. If you look outside the city gates right now, I think you’ll find a giant wooden horse with a trapdoor in its belly. Because I’m a Cassandra, you won’t believe me, of course.”
And yet this could be Cassandra’s time. According to Bloomberg, “The secret to success for Julie Dickson, the most-powerful woman in Canadian banking and watchdog for the world’s soundest lenders, is to assume Nouriel Roubini is always right.” Dickson, head of Canada’s Office of the Superintendent of Financial Institutions, says, “In my business, I don’t pay attention to all the people who are upbeat; we focus more on what could go wrong. What’s the right word for people like Nouriel Roubini?” Isn’t it “doommonger”?
At Seeking Alpha, David Alton Clark reads the entrails: “With the latest announcement by the ECB’s Draghi and the strong possibility of the Fed implementing another round of QE, I am extremely bullish. I believe gold and silver at their current levels provide an excellent buying opportunity.”
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