The Terrifying $250 Trillion Time Bomb, Gold And Escalating Currency Wars

"The successive rounds of money creation are to be shoveled into the system. Negative interest rates exist in Switzerland, Germany and Japan reminiscent of the Great Depression. Money is not money any more. Sub-zero interest rates are the norm. We believe that sooner or later, there will be a need for money and rather than a mass produced fiat currency, capital will flow to that store of value that can be created without a push of the button.

Another problem is that the collapse in oil prices has raised risks in the world’s interconnected financial system. The world’s biggest banks possess some $250 trillion of energy exposure which are mismatched while leverage remains high. Russia’s central bank has already bailed out a mid-sized lender and the country faces a repeat of the late nineties when it defaulted on its obligations despite some $400 billion of foreign exchange reserves. Can the ruble go lower?

Bursting Bubbles, Gold And Currency Fears

Meantime, gold is a safe haven amid concerns of weakening currencies. The stealth currency war removes the last shock absorber to the system. Gold is a barometer of investor anxiety. Today, the consequences of the oil collapse, renewed tensions in the Middle East, the unraveling of Russia and a repeat of the Eurozone crisis makes gold a much more compelling haven than the dollar.

Gold is a beneficiary of quantitative easing and has risen before every round of QE. Seven years ago, the Fed’s unveiling of QE was a catalyst in gold’s torrid bull run. Gold is also a hedge against central banks’ penchant of unpredictability in a world of competitive devaluations and negative interest rates. No one, it seems, remembers that it was massive monetary accommodation and rampant speculation that led to the bubble whose bursting caused the Great Depression..."

at http://kingworldnews.com/terrifying-250-trillion-time-bomb-gold-escalating-currency-wars/