Don't get me wrong, they WILL cut rates eventually as will every nation on the planet, thus pounding their currencies each time. this loss in purchasing power will be rationalized as necessary becasue of economic probs. This is precisely the reason gold will rise. As interest rates around the world drop and economic activity DOESN'T pick up as everybody anticipates, and currecnies continue to decline against each other, gold will soar as it becomes the final currency refuge where people can't simply turn on a printing press and print up more gold anythime they want.
as for Germany cutting now, I say No, cause of the EMU. If they do, that will cause more problems, and might postpone the fall of US mkts but not prevent it. The mkt is telling us they won't cut rates. gambling that they will would be a huge surprise to the mkt, comparable to gambling on an asteriod hitting the planet. Yes, both COULD happen. |
