By Dominique de Kevelioc de Bailleul
Speculation of a post-presidential-election-central-bank-coordinated money bomb of fresh new cash from the Fed, the ECB and other central banks, appear to be just that: speculation. That, according to a regular guest of Eric King’s King World News (KWN), Swiss money manager Egon von Greyerz.
The global central bank bailout and “the coordinated money printing I have been talking about for a long time is going to happen this autumn,” says von Greyerz. “I can see an autumn with massive storms, Eric.”
Not only has the precious metals market sniffed out an imminent and overt global QE3 plan, the western bank cartel is presumably buying the Spanish 10-year bond ahead of the announcement, taking rates sharply down within a two-week period to 6.02 percent, from a 7.62 percent print of Jul. 24. Buyers of the Italian 10-year nearly achieve the same performance during the same time period.
Those moves serve as a telltale sign that a money bomb will come before Novemebr.
“They [ECB and IMF] must do everything they can to eliminate counterparty risk because the counterparty risk in the system is massive,” adds Greyerz, which may include strong-arm tactics, according to Mail on Sunday American columnist Mary Ellen Synon.
She surmises that the ECB’s planned policy action of “outright market transactions”, as ECB President Mario Draghi called the debt monetizing scheme in an ECB press release this week, will contain provisions that include the classic IMF ‘carrot-and-stick’ approach to getting things done.
Synon suggestes that, instead of one of the PIIGS getting a bailout—first—before demonstrating agreed-to ‘austerity’ measures have produced results for an additional tranche, the ECB plans to wave money at the people of the country in question and wait for its political leadership to succumb to the pressure to allow the IMF to takeover the nation’s fiscal matters, just as all small Central American nations have had to endure when working with the IMF.
“Start with Spain. Imagine Prime Minister Rajoy is finally forced to go for an official bail-out,” Synon states in her article, titled Draghi’s new plan to save the euro: ‘Goooood morning, Vietnam!’.
“He has been resisting it, apparently because bail-outs are for little people like the Portuguese and the Greeks, not for important Spain,” she adds. “But Rajoy gets strong-armed. The EU-ECB-IMF troika designs a plan (which may or may not include IMF money). He has to sign.”
von Greyerz agrees, but falls short of speculating how the behind-the-scene politics will play out for a country like Spain to agree to unpopular cost-cutting measures at the nation-state level.
“There will be pressure from one country to the next,” von Greyerz continues, “and the ECB, European governments, the IMF, and the Fed, they will all be fighting to keep the system together and that will mean printing more money.”
Further speculation from other analysts is: if no signature to an IMF ‘package’, Rojoy must somehow resign to make room for another Goldman Sachs syndicate operator to take control of the country and sign—a la Greece.
All of that drama in Europe will take place before Nov. 6., according von Greyerz, who relays his recent observations of frantic activity in the paper gold market taking place behind the scenes.
Someone doesn’t believe any plan put forward by the ECB to stabilize the PIIGS will work, with a history of two previous plans by the troika having already failed. This time, the big players are going for the physical gold, and its rumored that those creating a stir in the physical market come from the East.
“I need to add that we are now seeing a lot of fund managers and investors moving out of gold ETFs, and taking delivery of physical gold and holding it outside of the banking system,” he said.
“The reason for this is investors and asset managers are becoming deeply troubled at the thought of a systemic collapse, and the gold being encumbered inside the banking system in that circumstance.”
von Greyerz, KWN’s most bullish contributing analyst, believes the coming weeks will start the next leg higher in the gold price, with the bulls taking gold to bizarrely high levels as the result of the panic deliveries of physical gold and silver bullion (an observation also made coincidentally by one of Hat Trick Letter publisher Jim Willie’s sources).
“This move in gold and silver has barely started,” von Greyerz concludes. “We will eventually see $100 up-days in gold, and silver will move several dollars in a single trading day. So we will see an acceleration this autumn.
“We will reach these short-term targets of $50 in silver, and roughly $2,000 in gold. But I would add that I expect gold to reach $4,000 to $5,000, and silver $150, without any major correction.” The time frame for such a massive move, he has said in previous interviews with KWN, is 12 to 18 months.