Issue #130
Dear Member,
For months now I’ve been beating the bush about Europe’s sickly economy, and few believed me. Yet now, the European Central Bank’s (ECB) Chairman, Mario Draghi, took the central bank’s main interest rate policy NEGATIVE this morning — to MINUS 0.10%.
What this means is the following: If you deposit euros with the ECB, it will charge you 0.10% for holding those funds.
In other words, it doesn’t even want its own money. Instead, it wants to penalize commercial banks for not lending the money into the economy, to help stave off DEFLATION.
Will it work? I seriously doubt it. But I do know this:
A. The decline in the euro that I have been warning you about is now picking up momentum. That’s due to the ECB’s actions this morning, as well as their announcement, also this morning, that it will engage in more quantitative easing, or bond purchases.
B. The banks will not speed the money into the economy. But what they will do is start speculating with it. And that is going to impact the markets precisely in the way I have been telling you …
Sending the dollar as well as gold and silver HIGHER.
Indeed, this morning gold is responding positively, up more than $7 as I pen this issue, right along with a stronger dollar. Silver is up roughly 17 cents.
Not big moves, but a sign of things to come. Just as in the early 1930s, when deflation last hit Europe, gold, the dollar and mining shares SOARED.
Right now, there’s wild action in the markets. And, there are bound to be pullbacks in the metals, perhaps even one more move lower as the bottoms get cemented in.
But I am very pleased to see my overall macro-economic picture fall into place, for with that will come the trading markets that we have all been waiting so patiently for.
Right now, I need to see the dust settle in today’s trading action and how the systems look once the market fully digests what Draghi has done today.
So for now, hold all positions, including the shares in IAG purchased on Tuesday.
If, for some reason, you have not purchased your shares in IAG, please do so now, per Tuesday’s alert.
Also, please stay tuned to your inbox. I expect to issue new trades very soon.
Best wishes, as always …
Larry
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