ECB To Print Trillion Euros – Gold Could Surge 40% In 15 Minutes Against Euro, Dollar
By: GoldCore
GoldSeek.com
Thursday, 22 January 2015
Mario Draghi is preparing to unveil QE today as the ECB looks certain to announce it’s much anticipated quantitative easing (QE) program. The move to print up to €1 trillion euros in the coming months appears to be a fait accompli although it will occur against a backdrop of strong German resistance and many concerns.
Following leaks that mainstream news sources regard as credible, the ECB is expected to announce monthly purchases of €50 billion in government bonds of member states. The scheme is expected to run from March until the end of 2016 – for some 21 months – bringing the total to around 1 trillion euros. The ECB’s balance sheet currently stands at about €2 trillion.
Proponents argue that the move should or will prevent deflation and help revitalise the ailing euro zone economy.
It is hoped that QE will counter low euro zone inflation by increasing the amount of money available to financial institutions and to encourage lending by banks.
The aim of QE is to counter disinflation and act as a large stimulus to struggling economies. It should lower the cost of borrowing for European governments, which in theory should increase the availability of credit across the euro zone.
Although interest rates are already at record lows in the Eurozone and globally and yet economic growth remains weak.
It is also hoped that it will potentially boost equity markets. This has happened in the US and UK and more recently in Japan. However, the jury is still out if the “wealth effect” is actually aiding the struggling working and middle classes.
Many have voiced concerns about the ECB QE including Angela Merkel, Axel Weber and Andrew Sentance.
Weber, the former head of the Bundesbank cast doubt on the future viability of the euro yesterday. He said that if countries do not follow Germany in imposing structural reforms to boost their longer-term growth rates the euro would not survive.
He called the probable introduction of quantitative easing by the ECB as “only part of the fix.” Weber, now the chairman of UBS, said there were legitimate questions hanging over the viability of the single currency.
The Rest…HERE
