Eric Sprott explains that central banks are the driver of the markets due to their many liquidity injections and purchases. He believes that the bonds of Italy, Spain and other EZ countries are down because of the LTRO, and is worried that once started, banks are addicted to the cheap funding. Eric Sprott believes that 90% of the market positive up moves are due to the Central Banks operations. The problem is what happens, when world investors start to question the creability of the CBs, and also do not want to invest in bonds? The problem is that there is no last resort to the Central banks ... China and Russia reduced it's USA treasuries, and increased gold bars buying in effect to the CB operations worldwide. Printing is like drugs, once started it can not be stopped, and even though markets rise short-term, we have no idea what the long-term consequances will be.
Eric Sprott is a Canadian hedge fund manager and founder of Sprott Asset Management. He became a billionaire on paper with the initial public offering of Sprott Inc., the parent of his Sprott Asset Management firm.