Debt Crisis and the Euro Blood Bath, ConDem Death Embrace, Weeks Analysis Review
News_Letter / Financial Markets 2010 May 24, 2010 - 02:00 PM GMTBy: NewsLetter
The Market Oracle Newsletter
May 15th, 2010 Issue #30 Vol. 4
Debt Crisis and the Euro Blood Bath, ConDem Death EmbraceInflation Mega-Trend Ebook Direct Download Link (PDF 3.2m/b) Dear Reader The UK election politicking is over, Britain has a new ConDem government led by David Cameron of the Liberal Democrats and Nick Clegg of the Conservatives, or is the other way around, hard to tell these days. The coalition government parties have publically locked themselves into a 5 year death embrace. They had no choice, as their honey moon period will soon evaporate as the government has no choice but to implement swinging spending cuts and mega-tax rises such as VAT to 20% to fill the 25% black hole between what the government spends and what it earns in revenue which will soon ensure that the ConDem government is destined to become the most hated government of the past 50 years! The ConDem strategy is clearly to survive the painful years of 2010-2012 and then engineer an election boom into 2015. If the coalition disintegrates during the pain years then that would likely result in a Labour landslide victory. The pressure is now completely off of Labour who succeeded in killing two birds with one stone (12 May 2010 - Gordon Brown Mission Accomplished, Labour General Election Plan a Magnificent Success). Labour are now FREE to go on the offensive and play mischief as their strategy is clearly to systematically rip the coalition government apart that I would be surprised if it does not disintegrate within a year. It is just not manifestly workable for a partnership between left wing and a right wing parties to survive. Stock Market - The stock markets are flipping from one day to another from flash crash to flash bounce back to flash crash, it's difficult enough to know what's going to happen tomorrow let alone further out, still my Sunday's newsletter will attempt to conclude towards a stock market forecast trend for the next 2 months. Gold / Dollar Gold and the dollar continued their bullish dance as a consequence of TREND. British Pound Ended the week weak at £/$1.45, still targeting a sub £/$1.40 low. Euro Blood Bath The Euro continued its slide right into the end of the week closing at 1.2358, down 10% in less than a month. My early week analysis (11 May 2010 - E.U. $1 Trillion Bailout, Detonates Nuclear Option of Printing Money to Monetize PIGS Debt) speculated that the most probable outcome is for the Euro splitting into two which basically means Germany would stand on its own. EURO II ? This, first of a series of money printing debt monetization bailouts puts the Euro firmly on a trend towards high inflation as are all fiat currencies, i.e. the fundamentals of the Euro block composed of many small weak economies that cannot devalue internally against highly competitive strong economies will still remain. The only possible solution is for a Euro II, i.e. split the Euro into two currency blocks one for the weak that suffer higher inflation and interest rates and the more competitive countries as part of the Euro II block (could just be Germany on its own?) which would act as a safety valve in times of economic crisis that demands internal currency devaluations. Everyone's dumping the Euro and European stocks, time for selective accumulation into Germany? Remember, Panic and Crisis breed opportunity! Ihr Deutschland investierend analytiker. Comments and Source: http://www.marketoracle.co.uk/Article19511.html By Nadeem Walayat Copyright © 2005-10 Marketoracle.co.uk (Market Oracle Ltd). All rights reserved. Featured Analysis of the Week
Most Popular Financial Markets Analysis of the Week :
By: Brian Hunt If you think that what’s happening to the bankrupt economies of Greece, Portugal, and Spain are merely a sideshow in this great financial crisis, it’s only fair to warn you: The facts I reveal in this bulletin are shocking … shameful … and, to anyone who cares as much about this nation as I do, deeply disturbing.
By: Video The Dow Jones industrial market is down and looks to continue to head that direction. This is not good news for the worlds economies that are trying to bounce back after this recession hit many different nations. Is this a direct reflection of the Greece financial crisis?
By: John_Mauldin Last week we focused on the first half of a paper by the Bank of International Settlements, discussing what they characterized as the need for "Drastic measures ... to check the rapid growth of current and future liabilities of governments and reduce their adverse consequences for long-term growth and monetary stability." As I noted, you don't often see the term drastic measures in a staid economic paper from the BIS. This week we will look at the conclusion of that paper, and then turn our discussion to the fallout from the problems they discuss, initially in Europe but coming soon to a country near you.
By: Mac_Slavo The internet, and especially gold forums, are getting excited over the possibility of very big news from Germany this Friday.
By: Nadeem_Walayat The election is over but Britain still waits to find out who will form the next government. The outcome has resulted in a just about as hung a parliament as one could have expected. As things stand clearly the two parties that are most likely to form a coalition government are the Conservatives and Liberal Democrats with a combined total of 364 (307+57), well above the 326 seats necessary for an overall majority.
By: Steve_Betts That’s exactly what has happened, the United States government in cahoots with the Federal Reserve and a number of the world’s central banks, conspired to defraud the vast majority of human beings out of their wealth. The fraud began back in 1913 with the creation of the IRS and Federal Reserve, and for decades was confined to the US.
By: James_Quinn Day after day, bankers have been paraded before Congressional committees regarding their role in the financial crisis which brought the financial system to the edge of the abyss on September 18, 2008. Every one has claimed that they were not responsible in any way for the disaster. They blame once in a lifetime circumstances that no one could have anticipated. It was a perfect storm and they had no way of knowing. These Harvard MBA Wall Street geniuses, who collected compensation in excess of $100 million each before the collapse, had no idea what was going on within their own firms. Ignorance and stupidity is no excuse for losing a trillion dollars.
By: Jim_Willie_CB The events of the last 12 to 18 months have been as shocking as they have been instrumental in reshaping the global financial structures. In fact, the events have pointed out the fracture of the global monetary system and banking systems. The steady stream of events is accelerating in scope and intensity. The fractures are finally being recognized. The key to understanding the continuation of disruptive and chaotic events is the realization that nothing has been fixed, no remedy put in place, no reform agreed upon, no liquidation of impaired bank assets completed, and no work toward a more stable system.
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