Extend and pretend is the phrase that will be written on the tombstone of the early 21st century governments and central banks.  that is all they can do at this point.  Since announcing QEIII back in September the Federal Reserve has not actually begun printing and more than the E.C.B. has.  The E.C.B. has the excuse that they have to get their member states to ask for the bailout first along with agreeing to cede control over their economy to them.  It seems a small price that most, if not all, politicians are willing to play.  Spanish PM Rajoy has not done so yet, asking instead for more favorable terms, which, frankly, he is not going to get.  Who does he think he is?  These people didn’t cave to Iceland, Ireland, Greece or Portugal.  The track record is very clear and Rajoy knows that it is either accept the yoke of tyrannical control from Brussels or be replaced and his more pliable successor do so on behalf of the Spanish people.

The same will hold true in the U.S. except that it will come in the form of holding back from expanding credit until the rhetoric of doom and gloom can be stoked to a fever pitch and some horrible worst-case version of tax increases and spending cuts will be agreed upon by the jackals in Washington D.C.  In the meantime Gold will continue to be blocked below $1800 per ounce and the stock markets will be allowed to trend lower until the Fed gets what it wants from Congress.

Equities were flat today with the S&P essentially unchanged at 1380.00 and Gold was held back from pushing through its 50 day moving average at $1736 and settled a couple of dollars lower at $1728 per ounce.