Europe is falling apart and economies both small and large arenâ€™t immune to fears of a meltdown. While Spain and Italy are getting the most attention, you also need to pay attention to France. With the countryâ€™s negative economic numbers and wide exposure to both Greece and Spain, the future doesnâ€™t look good for Les Bleus, which is even worse news for the euro (EUR).[Read more...]
Worries over the sovereign debt crisis have pushed investors out of the euro (EUR) and into the US dollar. The â€œriskâ€� trades have been pulled off the table, and investors are seeking shelter in the relative safety of the dollar. I had a reader ask me what I was looking at on Friday when I wrote that the euro had ticked higher versus the US dollar. Apparently I need to remind everyone that I write this at around 5 AM, so when I talk about the euro moving higher, it is in the early European trading. On Friday, the early euro strength was quickly reversed as the US trading desks took the dollar higher.[Read more...]
Watch out today at noon, Eastern Standard Time… Thatâ€™s when the Fed/Cartel, is going to post on its website, just who were the recipients of $3.3 trillion in emergency aid back in 2008, during the financial crisis… The Cartel (or â€œBernankâ€�) has fought to hide this information, but one of the items in the financial overhaul regulations makes the â€œBernankâ€� comply with the demand to disclose the recipients…[Read more...]
Letâ€™s look at how the European debt situation developed.
When Europe brought out the euro in 2002, it changed everything. All of a sudden, you could lend money to Ireland or Greece without having to worry about the Irish pound or the Greek drachma. They were all using the euro, which was managed by the Germans. So why not lend to one of these peripheral states of Europe and earn a little more interest?[Read more...]
Today, the euro. Tomorrow, the dollar.
The euro is taking a beating. Investors are worried that it won’t survive Europe’s debt problems.
Note, we said ‘debt’ problems. Many experts still believe it is a liquidity problem. That is, they think it’s just a problem of finding financing. They blame speculators and hedge funds for panicking…or for deliberately cutting off the flow of juice.[Read more...]
Where do bad debts go after they die?
On Monday, investors seem to have convinced themselves that they just disappeared…like Amelia Earhart or TARP funds. But by Tuesday, they began to worry about ghosts.
As in the US, the specter haunting Europe is debt. In America, bad debt in the private sector – led by subprime mortgages – caused havoc on Wall Street in the autumn of 2008. It was as if all Hell had broken loose. The feds rushed to the rescue; but what could they do? They could not exorcise the evil spirits. They could only move the debts from one debtor to another – putting at risk an additional $8 trillion of the taxpayers’ money.[Read more...]
The real threat is the risk Greece poses to banks – not just in Greece, but throughout Europe. While we were ensconced in the Fiscal Summit on Wednesday, Rob Parenteau called frantically alerting us to his forecast that civil unrest in Greece in particular, and Europe generally, was about to get worse.[Read more...]
Louis James (Senior Editor, Casey Research): Doug, last time we spoke, you said quite a bit about debt, in the context of your expectation that the euro is on its way out. At the end of that conversation, you mentioned, of course, that the problem is not limited to Greece, nor the eurozone. America as a country has become a world-class debtor, and many Americans seem to think a maxed-out credit card is a reason to get a higher credit limit, not to economize. It’s like a global epidemic. Let’s talk about debt.[Read more...]