You Ain't Seen Nothin' Yet

Mish Shedlock (MAA) provides several references on how the European Central Bank (ECB) will be pumping another trillion or two euros into European banks beginning next month .. Shedlock remarks that banks are supposed to be taking the money & applying it to increased bank lending, but they won't - the banks will likely simply take the guaranteed profit by speculating in Spanish or Italian bonds - "However, that's quite a risk, and in my opinion Spain will need a writedown. If so, Germany will be on the hook once again .. the operation will fuel more bank speculation and more leverage in government bonds. Money supply will soar, lending won't and this rates to be good for gold."

Link here to the article