Crazy Money Printing by CBs Far From Over

As it stands, there’s only one major central bank that’s trying to raise interest rates: the US Federal Reserve. Across the globe, the majority of central banks are keeping rates low, while others are still practicing the art of paper money printing.

In a recent press release, the European Central Bank said, “The Governing Council expects the key ECB interest rates to remain at their present levels for an extended period of time, and well past the horizon of the net asset purchases,” media analyst Michael Lombardi wrote for Lombardi Letter.

In other words, the ECB threw out any chance of an interest rate hike. The ECB is currently implementing a negative interest rate policy while still printing new €60 billion ($67.19 billion) a month.

All those years of low interest rates and money printing are having the expected negative impact on the euro.

As the ECB tried to bring growth to the common currency region by lowering interest rates and printing money, the value of the euro has deteriorated. It is believed that the euro will fall a lot further in value against other world currencies.

The ECB isn’t the only central bank doing this; we are seeing this phenomenon around the globe. For example, the Bank of Japan has implemented a policy of negative interest rates and money printing, too.

Don’t for a second think that central banks are going to stop their reckless behavior anytime soon. It’s a currency war. Central banks are under the impression that keeping interest rates low and printing money bring prosperity and economic growth to their countries, Lombardi commented.

But the reality is that they are failing to revive their economies, and their currencies have plummeted in value. There’s going to be one currency winner over the long haul: gold. The yellow metal is disliked by the market right now for all the wrong reasons. But, with all this money printing continuing, it’s not a matter of if gold prices will hit $2,000 an ounce, but when.

Don’t ignore gold prices. They are setting up to reward big-time. Another bull run, like the one after 2009, could be in the making. As cliche as it may sound, if investors are snoozing on the precious metal, they could be losing out on massive gains.