More QE Coming To Europe Next Week

The warning flags are up, and time is running out for a solid rally. Be careful, and watch these key indicators over the next few weeks to see where the wind is blowing, writes MoneyShow.com senior editor Tom Aspray. Friday's final triple-witching day of 2011 was pretty quiet overall. Despite generally good news for the US economy, stocks closed lower for the week.

  The tension between Central Banks that we noted yesterday continues to worsen. This time it was China and the EU, not just Germany, that fired warning shots at the US Fed. A senior Chinese official said on Friday that the United States should cut back on printing money to stimulate its economy if the world is to have confidence in the dollar.

Both Angela Merkel and the Bundesbank are walking an extremely fine line of economic policies and treaty arrangements that appear to be in violation of policy statements made by the German Supreme Court regarding transfer unions. Moreover, the Bundesbank president is now in what amounts to an open Feud with Merkel. Bundesbank 228 Billion Euros in Debt Rescuing Europe

Ordinarily in the first post we would recap any of the key overnight events, but in this case there was just one event of note ahead of today's non-farm payroll seasonally adjusted "noise": the halting of the Japanese Government Bond complex due to excessive volatility. Now, this is not some zero-liquidity penny stock or an algo fat binary finger: at last check there is one quadrillion yen in Japanese debt, which makes it the second biggest sovereign bond market in the world.

Via Email, here is a nice summary of European events from Steen Jakobsen at Saxo Bank in Denmark. Topics include the G20 Summit, Extend-and-Pretend Dogma, Capital Flight , and Geopolitical Risks. Steen Writes ... Two Trillion Fantasy This week-end's G-20 came and went without any real new information. Yes, the policy makers wants us to believe ultimately IMF will have 2 trillion US dollars at its disposal.

Article written by Prieur du Plessis, editor of the Investment Postcards from Cape Town blog.The article below is a guest contribution by Prof Hans-Werner Sinn, President of the Munich-based Ifo Institute.