Swiss Franc & Euro Decouple, Russia Cuts Gas, Road to WWIII
by Greg Hunter, USA Watchdog My top story is Switzerland and the surprise move to remove its cap against the Euro. This cap kept the two currencies roughly the same value–but not anymore. The move was such a surprise that even IMF Chief Christine Lagarde admitted the move by Swiss National bank (SNB) caught her off guard. It also caught currency traders by surprise as the Swiss franc soared by as much as 30%. Gold also spiked on the news. Why was this every-man-for-himself action taken by the SNB? It appears more money printing is coming, and this time it will come from the European National Bank (ECB.) It appears Switzerland wants protection from inflation. My friend Gregory Mannarino from TradersChoice.net gave me his take today. Mannarino says the Swiss are getting ahead of an announcement that will probably come from the ECB next week that it, too, is going to embark on massive Federal Reserve style QE, or money printing. The Swiss did not want to print even more money to maintain the so called “cap” or peg that kept the two currencies basically the same value. That’s not all. Mannarino says the Euro will continue to plunge on the new probable money printing announcement, and that will produce a spike in the U.S dollar. As the U.S dollar moves up, the Fed will have the cover needed to bring it back down by introducing another round of money printing we affectionately call QE4. Why would the Fed do this during a “recovery”? I’ll say it again, as I’ve said it a hundred times, there is no recovery! Look at this headline: “Consumer Spending Not in Line with Forecast.” That is putting it mildly. Here’s my headline: “Retail spending hit a wall and cratered in the fourth quarter.” Oh sure, oil prices have fallen and consumers are getting a little boost, but it will not make up for all the losses the big banks are going to have with the losses in energy and derivatives. Citi Group and JP Morgan are in deep trouble, and they are both going to need bailouts probably this year. Just Citi Group alone and its holding company have a combined $135 trillion in derivatives exposure. Citi Group’s earnings are tanking. Egon von Greyerz predicted QE4 before the end of the second quarter. My money says he’s right.