Governments are running out of bailing wire, otherwise known as spending and money printing. Prior efforts at fooling Mother Nature (or Mother Economics as the case might more properly be) have produced only massive distortions that not even Rube Goldberg could imagine. At this point, we are very near the end where the entire monstrosity created by government interventions comes crashing down.
Watch Out Below!
Zerohedge nails it! I could not agree more with the following:
So Much For That Gold Correction: Gold Surges As European Euphoria Wears Off, Euro TumblesTyler Durden on 07/22/2011 09:06
Some unpleasant developments for the ‘Risk On’ crowd have emerged in the past few hours, after gold and silver have both surged, with gold once again approaching recent all time highs, and is now once again at $1,605/oz. And the worse news is that after yesterday’s bazooka bailout, the EURUSD is again in tumble mode. What else will Europe pull out of its hat? Was this the most shortlived “rescue” in history? We certainly would not be surprised, as it conforms to our understanding that the halflife of central bank interventions is getting shorter and shorter. And with the USDJPY expect yet another pronouncement from Noda how the Yen’s moves are “one sided”… yet the BOJ will do absolutely nothing about it. Simply said the world is getting habituated to central planning rescues. That said, expect another tumble in gold following an imminent announcement of a debt ceiling deal. After that, the euphoria will be about 1 hour, 2 tops, at which point the reality of a global economic contraction will once again have to be faced only this time coupled with [X] trillions in fiscal cuts over the next several years. And that will be it for the upside catalysts.