Hey GuysThe printing presses have been primed and are set to...

Hey Guys

The printing presses have been primed and are set to start printing more Euros! Back in late December, the ECB printed 489Billion Euros.

Tomorrow they are about to announce the second round of LTRO, or money printing. The markets are expecting between 250Billion and 600Billion Euros to be released in new money to the European Banking system.

The theory is that the banks will be able to use these cheap, near zero funds, to continue to buy up European debt at much cheaper rates than they are currently demanding. Since they will be awash with new money, they will also be able to lend it to European companies and individuals at record low interest rates, which will assist to boost economic activity in the EU.

Since the govts are all pulling back their spending at a time where the European economy is slowing down, further exacerbating this slowdown, there needs to be a short circuit to the slowdown, and this is the only way to do it.

Printing money!

The 3 year LTROs will mean that they will slowly begin to reign in this cash in 3 years time, but in the meantime, this will probably lift inflation. The only hedge against inflation is gold bullion, which is still sitting near record highs of $1775/Oz!

Central Bank of Japan has also publicly stated that they want to increase inflation, they have been in a deflation trap for the last decade which has caused significant stagnation and decay in their economy. So expect the Central Bank of Japan to continue to accelerate their own money printing to ensure this happens.

It looks like they have all seen how Bernanke has conducted two QE events of $500-600Billion each, and both assisted the US economy to grow where there was no stimulus from govt available due to their huge debts.

The inflation rate has risen from -0.8% in 2009 to 3% peak in 2011, but it hasn’t gone out of control yet, due to the significant slack in the US economy, namely the 8-15% unemployment(depending on how you want to calculate it.) Since it has done more good than bad, the other countries like Bank of England, Bank of Japan and now surprisingly ECB are all printing cash themselves.

The banks will also be looking for accelerated returns in coming months, hence they will begin to invest a lot of these extra funds into hard and soft commodities.
The real big driver for our markets will be if Bernanke starts QE3, if that happens, we will see a sustained increase in our markets.

This is where Australia’s miners and explorers will benefit most!

Especially Gold Explorers..................IDC :)

Cheers Nectar


GLOBAL MARKETS: European Stocks Up With ECB's LTRO Main Focus
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-- Stocks slightly higher; banks advance
-- Investors look to Wednesday ECB LTRO
-- Easing oil prices support sentiment but corporate news mixed

By Andrea Tryphonides and Ishaq Siddiqi
Of DOW JONES NEWSWIRES

LONDON (Dow Jones)--European stock markets were marginally higher Tuesday, with banking stocks gingerly higher ahead of the European Central Bank's second long-term refinancing operation due Wednesday while investors were unsurprised by Greece's downgrade to "selective default" by rating agency Standard & Poor's.
The downgrade came late Monday, after banks agreed to write off more than half of their Greek debt holdings as part of the second bailout of the country. On Tuesday, the ECB temporarily suspended the eligibility of Greek bonds as collateral.
However, the move was largely expected and, as a result, equity markets were generally lackluster. By 1125 GMT, the benchmark Stoxx Europe 600 index was up 0.2% at 264.46. The market was largely unmoved by the euro-zone economic sentiment indicator, which showed consumers and businesses in the euro zone were becoming more confident. The ESI increased to 94.4 in February from 93.4 in January.
"It looks as if the improvement in financial market sentiment and better economic news from abroad have made euro-zone consumers and businesses less gloomy about their economic prospects," said Martin van Vliet, economist at ING Bank NV. "However, with more fiscal austerity in the pipeline, the debt crisis still unresolved and oil prices in euro terms breaching record highs, consumers and businesses still have plenty to worry about."
Elsewhere, Paris's CAC 40 was 0.4% higher at 3454.78 and Frankfurt's DAX was up 0.5% at 6882.44. London's FTSE 100 index was up just 0.2% at 5926.57. On the data front for the U.K., retail sales were flat in February with little improvement expected in March, according to a survey conducted by the Confederation of British Industry.
Banking stocks were higher Tuesday, as investors positioned themselves before Wednesday's second round of LTRO by the ECB. The Stoxx 600 index for the sector was up 0.3%.
Investors were uncertain what a small or large take-up of the LTRO would mean for markets.
"It will be interesting to see how the market reacts to a surprise either way: if banks are still stressed and in need of funding, a more modest outcome may be a better one for markets; but a larger number may be viewed positively should banks use the availability of unlimited financing to stock up on cheap peripheral assets and make profits on the 'free carry' being provided by the central bank," said Bill O'Neill, chief investment officer of European, Middle-East & Africa at Merrill Lynch Wealth Management.
Estimates for the size of Wednesday's LTRO range from EUR250 billion to EUR600 billion.
Meanwhile, retreating oil prices have provided some relief to investors' worries about fresh headwinds for the global economy. Morgan Stanley's analysts appear to be rather optimistic on the recent rise in oil prices. "We do not believe that the current rise in the oil price is sufficient to derail the global economic outlook," they said. "We believe the global economy is in a stronger position today than it was back [in 2008] when we were facing a financial crisis and impending recession."
April Nymex crude oil futures were down $0.27 $108.29 a barrel at 1115 GMT, while April Brent oil futures were down $0.94 at $123.23.
In corporate news, Peugeot SA shares surged 7.1% on reports General Motors Co. was in talks to take a small stake in the French auto maker. By contrast, Dutch navigation equipment maker TomTom NV shares slumped 16.5% after it said revenue is set to decline in 2012 as lower sales at its consumer business contributed to a 77% drop in fourth-quarter net profit.
In the currency markets, the euro was higher against the dollar but still struggled to make much headway as investors focused on the ECB's second LTRO. At 1115 GMT, the single currency was at $1.3437 against the greenback from $1.3397 late Monday in New York.
Elsewhere, spot gold was at $1,775.48 a troy ounce, up $0.58 cents from its New York settlement on Monday. The March bund contract was down 10 ticks at 139.64.
U.S. stock futures were higher Tuesday, indicating a positive start for Wall Street. The Dow Jones Industrial Average was up 0.3% at 13,011.0 and the S&P 500 front month futures contract was 0.4% higher at 1372.40.
On Monday, the DJIA finished down one point at 12,891.51 narrowly missing the key 13,000-mark. The S&P 500 gained two points to 1367.59.
-By Andrea Tryphonides and Ishaq Siddiqi, Dow Jones Newswires; +44-20-7842-9281; [email protected]