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Posts Tagged ‘EURO’

Currencies dropping like stones

July 15, 2011 Comments off

beforeitsnews

The markets have not yet thought about it, but the biggest threat to the Euro is not Greece, Ireland or Portugal, but the dangers posed by the fourth largest economy in Europe, which is also the third largest in the Eurozone, that of Italy. Italy is passing austerity measures but the measures may not be enough. The problem that the Euro faces is that there is little central control over the EU economy, control that exists affects states within Europe that have not adopted the Euro, as well as those that have.

Eleven years ago when the merits of the Euro were debated I argued against it. I was not fondly wishing to hold on to the pound sterling for sentimental reasons. I felt that there was a Read more…

Gold Rises As Greek Parliament Approves Austerity

June 29, 2011 Comments off

infowars

photoPhoto: Mike Herpel.

Gold traded higher for a second day on word that the government of Greece will accept austerity measures despite the overwhelming rejection of the IMF and EU plan by the Greek people.

“By now we think (the Greek vote) should be priced and the gold price shouldn’t react to a large extent if the austerity package is really approved later in the day,” Commerzbank analyst Daniel Briesemann told Reuters.

Reuters reported that its 19-commodity index rose 1.7 percent on Tuesday, the most significant daily rise in nearly six weeks, driven primarily by the news from Greece.

In addition to boosting gold, the news pushed the euro up over the dollar. Speculation that the Greek crisis will not stop the European Central Bank from raising interest rates next week also contributed to the fall of the dollar, according to Bloomberg. The ECB raised Read more…

Categories: GOLD, Greece Tags: , , , , ,

Economist Charles Gave: The Euro Will Not Exist In One Year!

June 28, 2011 2 comments

businessinsider

Charles GaveCharles Gave is the French economist whose research firm GaveKal is fairly well known, and read in some hedge fund circles.

In his latest note, John Mauldin reports on a dinner he attended with several investors and experts, of which Gave was one. At the dinner, he predicted the Euro’s imminent demise.

The section of the note is below.

——–

Will the Euro Survive?

We had dinner on Monday night at the home of Hervig von Hove of Notz-Stucki Bank, where I was speaking the next morning. There were 16 of us at the table, and these people represented a great deal of money as managers and investors. All very well-informed. We sat outside in perfect weather in the Swiss countryside. Charles Gave sat across from me at the middle of the table, and we talked and debated as the rest asked questions and offered opinions for 3-4 hours. The wine was flowing, and it was a most interesting evening. Now, with that set-up…

I was asked if I still thought the euro was going to parity with the dollar, and I said I did, although I was not sure what the euro would look like in three years, or who would be in it. There was some pushback from people who thought the dollar would be the weaker currency. So I asked for a show of hands as to how many people thought the euro would be higher in one year’s time. There were 6 hands raised, but one gentleman said he was actually abstaining. So I asked how many thought the euro Read more…

European Union growing more divided

June 26, 2011 1 comment

freep.com

IN GREECE: About 3,000 police officers, coast guard workers and firefighters protest salary and budget cuts on Thursday in Athens. Austerity measures in Greece have fueled disenchantment with the European Union.

 IN GREECE: About 3,000 police officers, coast guard workers and firefighters protest salary and budget cuts on Thursday in Athens. Austerity measures in Greece have fueled disenchantment with the European Union. / DIMITRI MESSINIS/Associated Press

FLENSBURG, Germany — Erik Holm Jensen slips between countries without a thought or a passport.

The 60-year-old business consultant drives from Denmark into northern Germany as smoothly as an American going from Delaware to New Jersey. There’s no hassle at the border, no guards to stop him. If he blinks, he misses the modest sign indicating he’s crossed from one country into another.

Such seamless travel is one of the European Union’s greatest achievements in its pursuit of a stable, prosperous continent built in the lingering aftermath of World War II. The other is the euro, like the wad in Jensen’s wallet that he can use in 17 nations.

But the twin pillars of Europe’s grand project are now Read more…

Trades reveal China shift from dollar

June 21, 2011 Comments off

 ft.com

China began diversifying away from the US dollar in earnest in the first four months of this year, most likely by buying far more European government debt than US dollar assets, according to estimates from Standard Chartered Bank.

China’s foreign exchange reserves expanded by around $200bn in the first four months of the year, with three-quarters of the new inflow invested abroad in non-US dollar assets, the bank estimated.

“It certainly appears that China’s finally following through on its policy to diversify its foreign reserve holdings away from the US dollar,” said Stephen Green, the bank’s chief China economist.

For over six years, Beijing has continued to accumulate Read more…

Categories: China Tags: , , ,

Signals Spain may seek bailout spelling disaster for eurozone

May 16, 2011 Comments off

rt.com

Violent protests against austerity cuts have broken out in Spain, as the country struggles to deal with record-high unemployment signaling that Madrid could possibly be next in line for an EU bailout.

Across the border, Portugal’s crumbling economy is desperate for a €78 billion rescue package. Read more…

IMF Says Europe’s Debt Woes Could Spread

May 13, 2011 Comments off

chosun

The International Monetary Fund is warning that the governmental debt problems in Greece, Ireland and Portugal could spread to other European countries that employ the euro currency and also to the emerging economies in eastern Europe.

In its semi-annual report on the European economy, the IMF said Thursday that officials so far have been able to contain the continent’s debt contagion to the three countries on Europe’s geographic periphery. But the Washington-based financing agency said there “remains a tangible downside risk” of debt problems spreading. It said European nations will have to make “unrelenting” efforts to contain their financial problems.

The IMF said weak banking systems remain a threat to the financial health of the 17 nations where the euro is the common currency. It said the reduction in the number of banks in Europe is proceeding too slowly and that greater financial integration on the continent is needed.

Greece and Ireland reluctantly accepted bailouts from the IMF and their European neighbors last year and now Portugal is Read more…

Timeline: Greece’s debt crisis

May 11, 2011 1 comment

reuters

Here is a timeline of economic events in Greece since 2010:

Jan 2010 – Greece unveils stability program on Jan 14, saying it will aim to cut its budget gap to 2.8 percent of GDP in 2012 from 12.7 percent in 2009.

Feb – Greece must refinance 54 billion euros ($66.6 billion) of debt, with a crunch in Q2 as more than 20 billion euros becomes due and market yields for Greek debt soar.

March 5 – Package of public sector pay cuts and tax increases is passed to save an extra 4.8 billion euros. VAT to rise 2 percentage points to 21 percent; state-funded pensions frozen in 2010.

April 11 — Euro zone finance ministers approve 30 billion euros ($40.67 billion) emergency aid mechanism for Greece.

April 15 – Greek parliament passes law that seeks to tackle tax evasion and shift tax burden to higher earners.

April 22 – Eurostat says Greece’s 2009 budget deficit is 13.6 percent of GDP, not 12.7 percent as reported earlier.

April 23 – Prime Minister George Papandreou asks for activation of an EU/IMF aid package. Read more…

Dollar keeps sinking while gold tops $1,500

April 22, 2011 Comments off

latimes.com

Silver, Gold up 49% 6% respectively on the year while Dollar keeps tumbling

The dollar is getting trashed again, driving a key index of the U.S. currency’s value to its lowest level in more than two years.

And as the greenback slumps further, gold and silver — the hard-money alternatives to paper currencies — are hitting new highs. Gold closed above $1,500 an ounce for the first time.

The DXY index, which measures the dollar’s value against six other major currencies (including the euro, the yen and the Swiss franc), slid to 74.10 on Thursday, down 0.4% from Wednesday and the lowest since August 2008.

Dxy421 Year-to-date the DXY index (charted at left) is down 6.2%.

“It’s a ‘sell the dollar, buy everything else’ market,” said Win Thin, a currency strategist at Brown Bros. Harriman in New York.

The euro hit a new 16-month high of $1.454 on Thursday, up from $1.451 on Wednesday. The dollar also hit a record low of 6.52 Chinese yuan, down from 6.56 yuan a month ago, as the Chinese government allows its currency to steadily strengthen.

The buck’s slump this year has been fueled in large part by the widening gulf between U.S. interest rates and Read more…

Stocks Sink on U.S. Credit Outlook as Euro Falls on Debt Crises

April 19, 2011 Comments off

businessweek

U.S. stocks sank the most in a month, oil slid and gold rose to a record after Standard & Poor’s cut the American credit outlook to negative and concern about Europe’s debt crisis worsened. Greek two-year bond yields surged to 20 percent for the first time since at least 1998.

The S&P 500 tumbled 1.6 percent to 1,298.09 at 1:13 p.m. in New York and the Stoxx Europe 600 Index slid 1.7 percent. Ten- year Treasury yields lost three basis points to 3.38 percent as concern about Europe’s finances overshadowed S&P’s move. The euro lost 1.4 percent to $1.4227, while Portuguese debt- insurance costs rose to a record. The S&P GSCI index of 24 commodities slid 1.3 percent as oil and cocoa tumbled.

S&P assigned a one-in-three chance it will lower the U.S. rating in the next two years, saying the credit crisis and recession that began in 2008 worsened a deterioration in public finances. Budget differences among Democrats and Republicans remain wide and it may take until after the 2012 elections to get a proposal that addresses the concern, S&P said.

“This is another indication of the need for the U.S. to better control its fiscal destiny, both for its sake and that of the global economy,” said Mohamed El-Erian, chief executive officer at Newport Beach, California-based Pacific Investment Management Co., the world’s biggest manager of bond funds. “Absent credible medium-term fiscal reform, every segment of U.S. society would be faced with higher borrowing costs, a weaker dollar and a less bright outlook for employment, investment and growth.”

Broad Decline

Commodity, industrial and technology companies had the biggest Read more…

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