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Europe Is On The Verge Of Collapsing

August 8, 2011 Comments off

globalresearch

Photo by Dieter Heinemann

The scale of impact is unpredictable, but potentially worse than that of the recent toxic assets crisis. The European bloc is the second largest economy, the first trade partner of China, the largest importer of Russian energy and the first buyer of high quality raw materials (it still holds the Hilton quota, the world’s most expensive meat quota).

All over the world European debt holders and many states maintain their reserves in euros. China, for example, has one-fourth of its reserves in such currency and holds a large amount of Greek, Portuguese and Spanish debt bonds….

Without debt restructuring involving important debt amount reductions and extended maturities, Greece will not be able to meet her commitments, just like the rest of Europe’s debt-overhung Europe’s periphery economies – Ireland, Portugal, Spain, and Italy, and the effects would certainly contaminate the rest of Europe including the region’s strongest economies.

The illusion of dampening the fire by deferring debt maturities is just that – a chimera. Unless public and private bondholders’ debts are reduced and longer maturities granted, default and meltdown are Read more…

Euro zone boosts powers of rescue fund to aid Greece, Ireland, Portugal

July 22, 2011 Comments off

theglobeandmail

Greek Prime Minister George Papandreou, left, European Council President Herman Van Rompuy and European Commission President Jose Manuel Barroso speak after the EU summit Thursday in Brussels. - Greek Prime Minister George Papandreou, left, European Council President Herman Van Rompuy and European Commission President Jose Manuel Barroso speak after the EU summit Thursday in Brussels. | AFP/Getty Images

Euro zone leaders agreed at an emergency summit on Thursday to give their financial rescue fund sweeping new powers to help Greece overcome its debt crisis and prevent market instability from spreading through the region.

French President Nicolas Sarkozy said leaders of the 17-nation currency area had agreed to ease lending terms to Greece, Ireland and Portugal, while private investors would voluntarily swap their Greek bonds for longer maturities at lower interest rates to help Athens.

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.

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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…

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…

Why the World Must Watch Europe

March 2, 2011 Comments off

realtruth.org

Beyond the EU Debt Crisis

The continent’s financial crisis gave rise to bailouts, infighting and demands for sweeping financial reform. Could there still be a bright future over the horizon for the European Union?

european_union_map-apha-110228.jpg
Source: Canstockphoto.com

Amid the shift in global superpowers, two names come up as heavyweight world championship opponents: China and the United States.

The constant media exposure and speculation could be likened to a pay-per-view boxing matchup.

In one corner: the world’s largest energy consumer—with a 1.3-billion-strong population—endlessly stockpiling natural resources—and holding nearly $900 billion in United States’ debt.

In the other: longtime democratic world champion—largest economy—and leader in manufacturing.

China is the clear favorite, but the U.S. is still in the running. On its way down from unmatched superpower, it is still a formidable opponent, with its manufacturing sector out-producing China by 40 percent.

Yet America is weighed down by a $14 trillion federal debt and rampant Read more…

THE EURO & U.S. DOLLAR COLLAPSE & DEVALUATION OF 50-70%

February 9, 2011 1 comment