Gold surges as chairman Bernanke signals more QE

To QE or not to QE? This is the question. No definite answer is still firmly enunciated, but all odds are in favor of another round of CTRL+ Print. Why? Too put it quite simply, because the massive US debt needs to be financed in some manner, and the easiest way to get away from this Damocles` sword is through a combination of inflationary devaluation and exchange rate manipulation. All under the noble banner of stimulating the economy. Now, why is this even important? It`s probably related to the narrow-minded "traders`" obsession with the term quantitative easing. Upon hearing mere hints or allusions towards more printing, the market turns haywire: launching in 5...4...3...2...1. The side-effects of such a policy of wealth redistribution are inflated asset prices and accumulated cash piles at the corporate level (which incidentally are usually left to "compound" in this negative rate environment).

Greek debt deal 95% agreed

A major breakthrough in Greek debt talks was reached today as investors representing 95.7% of Greece`s privately held bonds agreed to restructure their bond holdings without being classified as a credit event and thereby not triggering the underlying credit default swaps. Out of these 95.7% of bond, investors holding 85.8% of bonds have voluntarily agreed to swap their current depressed bonds with new, lower yielding, higher maturity bonds, and the rest will be forced to accept the restructuring under invoking collective action. Where to now ?

Wednesday market outlook

Interesting times we`re trading in. The markets are screaming for an impeding correction, but as the global printing press pumps liquidity into the markets the game of musical chairs has no choice but to continue. What will happen when the music stops and all these injections will prove they have diminishing returns? Until then, let`s take a look on what the markets did this week: gold has managed to hold the bullish channel it entered on the 22nd of February, the S&P looks like a rabid bull and the effects of Bank of Japan`s massive intervention on the yen seems to be wearing off.

Bullish economic data, just in time to save equity markets

Just after a major sell-off in precious metals (during which I was stop-loss-ed) and a slump in the S&P and the Dow, "good news" about the health of the economy surfaced: the initial and and continuous unemployment claims printed lower than expected, the the Producer's Price Index (PPI) signaled a mildly increasing inflation, an increase in manufacturing orders from -2.07 to 5.10 and a lower overall current account deficit. This coupled with FED chairman Bernanke's faith in the strength of the US economy suggests that the economic outlook has to get a lot worse before he will pull out more monetary firepower.

Market Talk: Risk-off day in all major asset classes

A sharp reaction from the financial markets came today after the participants expect further economic turmoil. US Stocks slump as the Goldman Sachs reported its second quarterly loss in almost 12 years and as IBM shows signs of weekness. Commodities drop, precious metals leading with Gold down 2.46%, and silver down 1.86%. Just a Manic Monday.

Are the Initial Jobless Claims "better than expected" ?

Today's initial jobless claims printed at 404k, "way better" than the estimate of 405k. That means the economy is going to get better and banks will start crediting again. Is that so?

Let's take a closer look on how the Department of Labor arrives at this particular figure:

Marc Faber: Americans need to tighten their belts and save more

Marc Faber, the well known author of the GloomBoomDoom Report, and widely regarded as one of the investors who predicted the 2008 crisis, has declared in a recent interview on CNBC: 

"I will tell you what the US needs.  The US needs a Lee Kwan Yew who stands in front of the US  and tells them, listen you lazy bugger, now you have to tighten your belts, you have to save more, work more for lower salaries and only through that will we get out of the current dilemma that essentially prevents the economy from growing."