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Our top article this week looks at comments out this week by David Blanchflower, ex-member of the Bank of England, where he said he thought the BoE would print up as much £225bn this year and may start this money printing as soon as next week.
To put that number in context it would be an almost doubling of the BoE's balance sheet and would make the BoE the biggest money printer on the planet by a considerable margin. It would also mean that the money printing is accelerating and not shrinking some 4 years after the financial crisis hit. When we say that the BoE will print, print and print some more we really aren't kidding and if Blanchflower is correct with his assessment of as much as £225bn in additional money printing this year the devaluation of the £ this year will simply take your breath away - prepare accordingly.
In the same article we also challenge Blanchflower on the very popular, but completely false meme, that there has been some sort of 'austerity' in the UK. The UK debt has exploded under the Tories and the spending is continuing unrestricted - not to mention the insane levels of money printing.
Gold's perfect start to the year looks set to continue. This will be the fifth week in a row or positive weekly gains.
Gold is looking to close the week around the $1740/£1100 - A small increase on the week. Gold did get as high as $1763 this morning taking out the intra-day high we saw back in December of $1753. There seems to be some resistance at the $1750-55 level that may prove a bit sticky as we move into next week.
In terms of £s the £1125 level really needs to be cleared if we are to see a quick retest of the all time highs the quarter. The BoE is out next Thursday with its interest rate decision and if Blanchflower is correct, we could see as much as $75bn in additional money printing (QE). This maybe the catalyst £ gold needs to break £1125.
However it is € gold that people should really take a look at - it managed to close January at the highest monthly close it as ever had in that currency and is now sitting only 2% away from all time highs.
Silver looks like having a flat week and is set to close around the $33.70 level. I think we can forgive silver for having a breather here after putting on 23% in gains since the start of 2012. Silver did manage to get as high as $34.40 this week and the 200 daily moving average around $35 is an easily achievable target for the bulls to shoot for.
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