Obama v. Merkel and the Power of Gold

by Gayle Plato

As Barack Obama woos the Germans with charm, Germany’s Chancellor, Angela Merkel, is not amused ( see drudgereport.com linked http://tinyurl.com/p2nr69).  Merkel is also quite skeptical of the financial machinations of the current U.S. Administration. There are stories in main stream media and blogs noting how Merkel is deeply concerned about pending inflation issues and the quantitative easing of the Federal Reserve pumping of money.

The Independent of the United Kingdom wrote of Merkel’s concerns and history: “Germany’s experience of the hyper-inflation of the Weimar Republic makes it highly suspicious of anything that smacks of printing money. Rigid adherence to the principles of sound money have served Germany well in the post-war period, with low inflation and a stable economy.” (http://tinyurl.com/ptfere)

Angela Merkel is openly chastising the FED actions of dollar injection, and of the Central Bank of England’s actions.  Note too that Gordon Brown, current UK Prime Minister is fraught with scandals and may face a vote of no confidence this year. Some speculate his resignation is being pushed. All of Europe leans on one another like cards, ready to hold each other up or topple, taking the shaky economic structure with them.  Is this a beginning of the Euro breaking and is there concern in Europe as to where the actual gold holdings are?

In April, I wrote of the gold COMEX obligations, and the Deutsche Bank linking to odd transfers of gold by the European Central Bank.  Noted financial blogs speculated after much research that Germany was trying to get it’s actual gold back, and needs to prove it exists.  The United States holds some of that actual gold too. Does Mrs. Merkel want it back maybe? Hmm.

 
 The Gold market is relatively small and might be opened to manipulation. The International Monetary Fund (IMF) has lots of gold and China has openly offered to buy some of that gold.  China will be contributing, loaning, whatever- billions into the IMF and it’s happening as I write. There are traders and those that research and monitor every single commodity and stock.  When they see any anomaly they jump on it.  Cash gold is down 2.4% on the COMEX at this moment, so I do not see any sustained gold buying. If  I do, I will be thinking about what is next. Beware the gold trader analysis too as it’s dripping with lots of conspiracy writers who give Dan Brown’s Da Vinci Code and Angels and Demons a run for the money ( pun intended).  Gold is as elusive as it wants to be; it also rests at the base of money and markets worldwide.

Once again, we see prices rise, unemployment rise, bond markets shakier than a no-doc loan holding cold chihuahua. A house of cards in Phoenix, with upside down mortgages second to none: the only green shoots- weeds in the front: we all await the butterfly effect.   A President Obama and his Czar-o-cratic economic team moves a shell in Europe or Asia, and all might tip the deuce of diamonds yet, only to see the joker standing.

References:
http://seekingalpha.com/article/129128-did-the-ecb-save-comex-from-gold-default
http://www.marketskeptics.com/2009/04/gold-prices-could-surge-on-sustained.html
http://www.ft.com/world
http://latimesblogs.latimes.com/washington/2009/06/what-obama-told-germanysmerkel-about-mideast-peace.html
http://www.independent.co.uk/news/business/comment/jeremywarner/jeremywarnermerkelslams-banks-loose-money-stance-1695500.html


Comments

  1. Oberserve says

    What China is doing is brilliant. They are buying SDRs which are IMF voting rights!

    Shame on us for deficit spending ourselves into such debt thereby enabling China.

    The boney finger of blame here can only be pointed at the mirror.

    And kudos to China for using free market principles to best us at our own game.

    That’s what we get as Republicans for electing mealy mouths such as McCain (who voted FOR PNTR for China) term after term.

  2. I hope that the voters of America learn soon that they need their paycheck much more than the IMF does.

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