OMT = QE = OMG!

As we reported in the Weekly Wrap last week, in response to growing widespread deflation risks, weak growth and growing unemployment (12%) in the EU the European Central Bank (ECB) made it clear last week it “is unanimous in its commitment to using all unconventional instruments within its mandate, in order to cope effectively with risks of a too prolonged period of low inflation”.  The UK’s Telegraph reported the EU is actually in deflation now when adjusted for austerity taxes at -1.5% over the last 5 months.  ECB’s equivalent of QE is called Outright Monetary Transactions (OMT) but is essentially the same desperate money printing exercise the US, Japan, and UK are employing to little effect save racking up huge amounts of debt.  They are also considering negative interest rates given they have nowhere to go at the current 0.25% which isn’t working.  The debasement of paper currencies around the world continues.  Gold on the other hand is getting harder and harder to extract.