I agree with Sprott, the price action in precious metals does not make sense, it should and will move higher. The Euro bank loans will never get repaid in cash….the banks will issue high priced equity and long term 20 year  bonds to cover the loans. The numbers are to big to get repaid in cash.



The recovery will take hold via higher inflation and shorter business cycles, very much like the 1970s; only this time we will see a leadership change in the top 5 countries who drive global GDP. Probably Europe GDP will shrink in real competitive terms, so will Japan and a few others.


This is a repost of what I said 2 weeks ago.

Parts in italics added on this post.

     The recent blip down in the gold price has the gold equity market spooked.


After the ECB massive 1 trillion cash injection, its balance sheets now stands at 4 Trillion Euro, give and take a few hundred billion either way.


4 Trillion Euro is approximately $5 Trillion dollars, most of this has been injected in the last few years.


1 Trillion is a mind boggling number, it easy to say, kind of just rolls off the lips with such ease; …….but it is very difficult for the mind to comprehend or picture the number in size and quantity.


 1 Trillion is a staggering large number.


After the ECB injected 1 Trillion, one would logically conclude that gold would go up.


Presently the Gold Price is set and benchmarked by a few wise men out of London; sooner then later it will be set by the Chinese with a Rinminbi that will be substantially backed by gold.


In the future, the gold price could be set by the Chinese, with London and New York just following or playing the trade. Very likely it will be the Chinese who set the rules and sets the price, especially if they have a Yuan substantially backed by gold. This will probably the biggest game changer in the last 100 years.



1 Trillion is a staggering large number.


For example think of the following


1 million seconds is about 11.5 days,


1 billion seconds is about 32 years


1 trillion seconds is 32,000 years.


If you spent one million dollars every single day since Jesus was born, you still would not have spent a trillion dollars by today. ( However My Wife Could)


I say gold goes higher.