Jonahsworm,Thanks for the news, which hopefully will serve to...

Jonahsworm,

Thanks for the news, which hopefully will serve to restore some form of risk appetite.

Next step in the right direction would be for the EFSF to reach the 1 trillion mark.

The funny thing is that people seem to have a terrible difficulty in understanding that bubble bursts, defaults, bankruptcies and the like are deflationary and not inflationary events.

The last thing that we want is events that may lead the European banks to reevaluate risk and curtail credit sending the whole European economy into a nose dive with induced effects propagating through the global economy. Gold needs imo credit expansion and not credit contraction.

Another thing that people also don't understand, which is not surprising as even Peter Schiff does not, is that when the FED buys treasuries from the banks it just credits the banks accounts in its books leading to the creation of extra reserves with the intention of inducing those same banks to expand credit by several times that amount (the credit multiplier, link bellow) but only if they SO WISH (WHICH THEY OBVIOUSLY DON'T as they became adverse to taking risks) and that the printing of money is done in the USA by the Treasury and not the FED.

Gold stocks are not much different from all other stocks and the reason for them lagging behind gold is imo partly because investors have been risk adverse and we need such mind set to change.

http://moneyterms.co.uk/money-multiplier/