The foundation is being laid for massive worldwide inflation. Expansive money creation programs in the world’s major economies have been under way for years, now the Eurozone is about the rejoin the game.
In July 2012, European Central Bank president Mario Draghi said that he would do “Whatever it takes” to preserve the euro. However, what he exactly said was, “Within our mandate, (emphasis added) the ECB is ready to do whatever it takes to preserve the euro. And believe me, it will be enough.”
“Within our mandate,” it appears is not enough.
Instead of quantitative easing, outright ECB purchases of debt to shove money into the banking system, Draghi opted for TLTROs–“longer-term refinancing operations.” With this scheme, the ECB made available €400 billion to banks at just over the ECB’s main refinancing rate of 0.05 percent until late 2018 so long as the banks lent to businesses.
The program had a feeble response. Banks drew down only €82.6 billion. The ECB had hoped to “expand its balance sheet” by €1 trillion under this and future TLTROs programs. Earlier in the year, the ECB’s balance sheet stood at €3 trillion, and now it just above €2 trillion.
Consequently, the ECB is preparing to move on to some serious money printing.
In doing so, it hired BlackRock Solutions, a subset of BlackRock, Inc, a Wall Street multinational investment management purported to be one of the largest–if not the largest–investment management entities in the world.
BRS will help the ECB design a program to buy asset-backed securities. In short, BRS will help the ECB implement quantitative easing in the Eurozone. It may not be called quantitative easing, but it will have the same result: a central bank buying assets with freshly-printed money.
The ECB’s governing council has not yet decided to go ahead with a quantitative easing scheme; but, with the Eurozone’s dismal economic outlook, approval is just a formality. Further, at the just concluded G20 meeting, the United States and Canada called on the EU to stimulate its economy. QE for the EU is not far away.
Many gold and silver holders watch these developments unfold and are bewildered that the metals are not going up. When will the dangers of money creation be recognized?
For the average person, recognition will not come until consumer prices rise at rates that cannot be ignored or concealed by the official stat keepers. Meanwhile, informed investors are quietly adding to their gold and silver positions.