GOLD is the money of the KINGS, SILVER is the money of the GENTLEMEN, BARTER is the money of the PEASANTS, but DEBT is the money of the SLAVES!!!

Monday, March 14, 2016

The Dollar and the Euro in a Negative Interest World with Joseph Trevisani










Even though the ECB announced its largest liquidity support package in history with negative rates for deposits and free lending on Thursday, currency markets paid more attention to Mr. Draghi’s claim that the central bank is done ‘for now’ on rates. After falling a figure and a half the euro rocketed more than four figures to its highest against the U.S. Dollar in a month. Is the ECB pause, or stop more important than the Fed’s pending rate increases? Mr. Draghi cannot have wanted the economic drag and disinflationary purchasing power of a stronger euro, though after the Bank of Japan’s recent experience it may not have been unexpected. European equities reversed lower, gold rose, the Yen strengthened, and commodities and crude oil fell despite the weaker dollar. The Euro was the odd man out. Can the united currency sustain its new-found health or was this just a temporary reaction, abetted by a powerful short squeeze, to the surprise of Mr. Draghi’s comment?

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