There's an OPEC meeting this week. Many of them despise each other and it's going to be worse this time around because the Saudis are pumping 12m+ barrels/day and the Iraqis are pumping 2m+.
They trying to sink the Iranians who are so desperate to sell oil they'll take local currencies.
Supply is way up, demand is way down. Lower oil means lower gold, and once it goes through $1500 there's nothing stopping it until about $1200.
Lower oil does not always mean lower gold---Those that hold some gold,for insurance,do so because they realize that anything can happen. Right now they are both looked at as commodities,but if things get really nasty it may not always be the case,especially if currencies get really shaky.
Alot more talk of QE3 around lately My money is that it will happen for better or worse,its just a matter of when. Its being saved as a last resort ATM because, well,thats about all they have left.
"With a good perspective on history, we can have a better understanding of the past and present, and thus a clear vision of the future." — Carlos Slim Helu
Fed Chairman Ben Bernanke also has made clear that the European crisis is a significant risk for the U.S. economy and left little doubt in testimony to Congress last week that the Fed was ready to counter significant strains.
"The Federal Reserve remains prepared to take action as needed to protect the U.S. economy in the event that financial stresses escalate," he said.
This probably would mean a third round of bond buying, known as QE3, though it also could extend a program to push down longer-term interest rates, known as Operation Twist. The Fed meets next week on Tuesday and Wednesday.
Meanwhile, the Bank of Japan is expected to keep its monetary policy unchanged when it concludes a two-day meeting on Friday as it awaits the outcome of the Greek election.
But a fresh wave of global risk aversion that sends investors flocking to the yen could well lead the BOJ to expand its 40 trillion-yen asset buying program, its main policy tool after it cut rates to a range of zero to 0.1 percent during the global financial crisis.
He is talking about if things turn to custard in Europe if the elections dont go well in Greece and France--So QE3 is a very real possibility but who knows with so many wild cards in play here-Sounds like the worlds leading economies are in lock down mode waiting to see what happens on the weekend--Whatever is happening right now could be very different come next week
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