Buddy, Can You Spare A Trillion?

Last Friday our headline on The Gold Forecast Weekend Report said "Ukraine Migraine." Fighting seems to have ebbed there for the moment, and, just as fierce battle did not give us a lift in precious metals, the cease fire did not give us a dip.

Quite to the contrary, gold and silver rose equally in percentage terms today. But there were other reasons they popped a bit.

The easiest reason to identify was (finally) a retreat of dollar strength against the euro, yen and British pound. However, dollar strength/weakness did not affect the total rise in precious metals at all today. Bravo.

Most crucially, the U.S. jobs report came in stunningly under estimates. In fact, so low were the numbers that some analysts are already calling it an anomaly, or even more extremely, saying the actual data is off. An anomaly perhaps, but it would be highly unusual for the statistics to be off by 35%.

Yet, the labor figures for June and July were scaled back and job growth seems to be stuck in second gear. Employment is moving, but the economy isn't cranking. And, GDP for the year is ragged, and that's being kind. GDP growth for the year is under 2%.

It's difficult to harmonize those data points with news released earlier this week and last week about consumer sentiment, manufacturing strength and strength in the service sector, all three of which are showing unusually good upside readings.

All that discussion aside, though, the Fed looks at the available data and today's job number tells us that the central bank is unlikely to raise interest rates "soon" (meaning in the first quarter of '15).

While the Fed, like Elvis, is trying to leave the building of QE, the European Central Bank is just stepping onto the stage with a parallel program. But - and it's a very big "but" - will Mario Draghi, chairman of the ECB be able to persuade the Germans, French, Dutch and Belgians to stop their suicidal home-country austerity drives?

Moreover, the ECB surprised the world financial community by cutting its benchmark interest rates to 0.05 percent from the previous record low of 0.15 percent. That may go lower, and tip into negative interest rates (and costs).

There is an absurdity certainly that some central banks are issuing mountains of credit and so little is making its way into the hands of small businesses, consumers, and students, all of whom need either more credit, or in the case of the latter, socially responsible re-structuring of debt.

Buddy, can you spare a trillion?

As always, wishing you good trading,