James Turk - Gold Set to Close Higher for 11th Straight Year

With continued fears about the situation in Europe and gold and silver prices stabilizing, today King World News interviewed James Turk out of Spain to get his take on the situation. When asked about the ongoing crisis, Turk responded, “There is some stunning news today here in Europe, Eric. In an attempt to ease the dire liquidity situation affecting European banks, the ECB announced a 490 billion euro, three year financing. This is back door quantitative easing and clearly shows the money printing mentality at the highest levels of the ECB.”

James Turk continues:

“The bad news is that this huge amount of funding does not provide the banks with sufficient liquidity, and the ECB has already announced another three year financing will take place in February. Clearly the ECB thinks the liquidity strains are not going to disappear in the foreseeable future. It is extraordinarily unusual for a central bank to lend money for more than a few weeks. This illustrates how desperate the situation is.

All of the above is in addition to the 215 billion euros of sovereign debt the ECB has already purchased. One really has to question to what extent the ECB is going to continue destroying its balance sheet, in order to keep over-leveraged sovereign governments and zombie banks afloat.

The ECB is trying to keep these banks liquid, but it is not doing anything to solve the real problem which is many of these banks are insolvent. The banks are sitting on mountains of bad debt that is related to the bursting of the real estate bubble, as well as government bonds, the repayment of which is questionable....

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