GOLD 0.51% $1,391.7 gold futures

Bank Watch, page-5

  1. 55 Posts.
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    I agree with you, though the question I was addressing was the likelihood of Deutsche Bank going under, not the effectiveness of negative interest rates and quantitative easing on GDP growth and inflation. But these are also reasons why there shouldn't be a collapse in the price of Gold should Deutsche Bank get further into trouble. Gold is the alternative to being offered 4 lollies in return for 5 of yours. Also, though you say the taps are already turned full on, we haven't yet quite reached the stage when Central Banks use their ability to create money out of thin air to pay for Countries' deficits, or prop up banks like Deutsche with 'loans' of billions of Euro. The more the currencies are debased, the more attractive Gold becomes.

    Ultimately it was liquidity problems that got the banks into problems following Lehman. I think that the Central Banks, particularly the ECB, have the tools to 'save' banks by providing them with whatever liquidity they need, without having to take them into public ownership i.e. without bankrupting them. And in the case of the EU Banks, anything will be preferred to calling the whole existence of the Euro into question.
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