And cut – chart chart du jour 3. Place your bets ladeez and gentlemanz!

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The chart below displays the ratio of global central bank balance sheets to the price of gold (i.e. how much gold is required to support the balance sheets of the world’s money-printers). As we can see itappears to be reaching an extreme…

To quote JP Morgan in their recently released Gold tome – 

In other words, for the ‘stable’ relationship between central bank balance sheets and gold to recouple, Gold would nee to be back to around $1800 an ounce; but given the Fed’s U-turn and no sign of stopping at the BoJ (or PBOC for that matter) and we suspect Draghi about to try to unleash a collateral-free LTRO3, the price of gold will have to be considerably higher before the world’s central banks are ‘backed’ again.”

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