ECB to provide banks with dollar loans
CIGA Eric

Here we go again, QE(n) to infinity on a global scale. Since the problem is not liquidity but rather (failing) debt, capital will continue flow out of Europe into various safe havens. As long as return of capital takes precedence over return on capital, gold will be one of many safe haven destinations.

Headline: ECB to provide banks with dollar loans

FRANKFURT, Germany (AP) — The European Central Bank announced plans Thursday to provide banks with dollars in three medium-term loan operations through the end of this year.

The ECB said it had decided to launch the three-month loans in coordination with the U.S. Federal Reserve, the Bank of England, the Bank of Japan and the Swiss National Bank.

Banking stocks have been hurt recently on fears that they were having trouble getting short-term loans from each other. These central bank loans would relieve that pressure.

Markets and the euro currency were already up before the announcement, but were further buoyed by the news.

Coming on top of mounting hopes that Greece will not be defaulting on its debts anytime soon, the news has helped ease concerns over the impact of Europe’s debt crisis on banking stocks.

Source: finance.yahoo.com ^[1]

More… ^[2]

The Real World Is Becoming Expensive For Most Americans
CIGA Eric

The real world, characterized by inability to eat iPads ^[3] or other small electronic devices, is growing more expensive each day.

CRBFoodstuffs And Year-over-Year (YOY) Change
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Headline: Consumers, restaurateurs feel pinch of rising food prices

Sue Lednicky has been a wary observer of grocery prices’ recent steep climb.

"It’s getting ridiculous to buy food," she said. "It’s painful. I was just complaining about the price of a gallon of milk at the grocery store," where she found 1 percent selling for $3.09.

It’s doubtful Todd Clore would argue.

"In dairy products, the swings have been more dramatic over the past couple of years," said Clore, owner of Todd’s Unique Dining in Henderson. "We used to be in single-digit percentages, where it would go up 5 (percent) to 8 percent. Now, it’s swinging 15 (percent), 20 percent sometimes."

Their statements are borne out by the University of Wisconsin, which reported that the national average price of a gallon of whole milk rose from $3.30 in January to $3.65 in July.

Source: lvrj.com ^[5]

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Hello Jim,

I saw the headline below and thought ‘hmmm, where have we seen this before?’ Someone must be reading your site.

Have a great trip,
CIGA Dan

Gold-Backed Dollar Puts ‘Fair Value’ at $10,000 an Ounce: Chart of the Day
By David Wilson – Sep 14, 2011 10:01 PM MT

Gold has the potential to jump more than fivefold as the precious metal’s price catches up with the surging amount of money in the U.S. economy, according to Dylan Grice, a global strategist at Societe Generale SA.

The CHART OF THE DAY shows the price at which each U.S. dollar in the monetary base, compiled by the Federal Reserve, would have been backed by an ounce of gold for the past half century. International Monetary Fund data on the country’s gold reserves were used in the calculation.

Grice, based in London, identified this price as the metal’s “fair value” yesterday in a report. Since June, it has exceeded $10,000 an ounce, as depicted in the chart’s top panel. Gold for immediate delivery closed at $1,819.63 an ounce on the spot market yesterday.

The bottom panel tracks the value of U.S. gold holdings, based on the spot price, as a percentage of the monetary base for the 50-year period. August’s proportion was 18 percent of the $2.66 trillion in the economy. The latter figure was more than triple the amount three years earlier, reflecting efforts by the Fed to spur economic growth.

More… ^[7]