LIVE Gold Prices $  | E-Mail Subscriptions | Update GoldSeek | GoldSeek Radio 

Commentary : Gold Review : Markets : News Wire : Quotes : Silver : Stocks - Main Page 

 GoldSeek.com >> News >> Story  Disclaimer 
 
Latest Headlines

GoldSeek.com to Launch New Website
By: GoldSeek.com

Is Gold Price Action Warning Of Imminent Monetary Collapse Part 2?
By: Hubert Moolman

Gold and Silver Are Just Getting Started
By: Frank Holmes, US Funds

Silver Makes High Wave Candle at Target – Here’s What to Expect…
By: Clive Maund

Gold Blows Through Upside Resistance - The Chase Is On
By: Avi Gilburt

U.S. Mint To Reduce Gold & Silver Eagle Production Over The Next 12-18 Months
By: Steve St. Angelo, SRSrocco Report

Gold's sharp rise throws Financial Times into an erroneous sulk
By: Chris Powell, GATA

Precious Metals Update Video: Gold's unusual strength
By: Ira Epstein

Asian Metals Market Update: July-29-2020
By: Chintan Karnani, Insignia Consultants

Gold's rise is a 'mystery' because journalism always fails to pursue it
By: Chris Powell, GATA

 
Search

GoldSeek Web

 
European ‘Austerity’ Flames Out with Elections

By: Rick Ackerman, Rick's Picks


-- Posted Monday, 7 May 2012 | | Disqus

Europe’s doomed experiment with the politics of austerity went down in flames over the weekend as voters across the region veered sharply to the left in savaging incumbents. Elections in six European nations on Sunday promised to end any pretense of fiscal sanity. However, it remains to be seen how quickly and drastically the new leaders will act to further unbalance their nations’ books, ostensibly in the name of economic growth. Whatever they decide, there’s a Catch-22 that could make any promises of budget-busting relief for pensioners and public workers impossible to keep. Recall that even the socialists in Greece’s parliament were forced to support austerity measures a few months ago, because without such measures the country would have been unable to borrow enough cash to meet payroll.

In fact, despite several bailouts in the last two years, Greece remains so close to the edge financially that even hard-core socialists might find themselves forced to play ball with the bankers. The “middle way” for them, as has been the case all along, will be to talk austerity while practicing fiscal profligacy. Eurobank president Draghi offered a preview of how this would be done, cribbing a page from Goebbels’s handbook. At a “whisper campaign” meeting in Barcelona over the weekend, he was quoted as saying (whispering?) that Europe could hammer out a “growth compact” to go along with deficit reduction. Like Bernanke, he evidently thinks people are stupid enough to believe such claptrap. But even if it is unworkable as policy, it will used to “manage expectations” in the same cynical way that the Fed chairman manages them. Draghi’ s task will be more difficult, however, because he will be at odds not only with Germany’s conservative bankers, but with a German press that harbors no useful idiots like Nobelist Paul Krugman to zealously advocate ruinously inflationary fiscal policies and Big Guvvamint management of…everything.

Bullish for Gold, Silver

Although the foregoing has bullish implications for gold and silver, the effect is likely to be muted because it will also be quite bullish for the dollar, at least initially. European investors will be seeking a “safe haven” more desperately than ever, implying that in the weeks and months ahead, they will be diving into Treasury paper and other dollar-denominated instruments that are perceived as relatively safe.  Rick’s Picks has been predicting a powerful rally in the U.S. dollar, and this weekend’s elections in Europe seem likely to be the catalyst. Under the circumstances, we should also expect the recent weakness in U.S. stocks to continue over the summer. Bullion will be feeling the weight of this, but we expect precious metals to correct only moderately from current levels nonetheless. Of course, it’s also conceivable that gold and silver will achieve at least middling gains over that time. In the meantime, although Apple shares remain our bellwether for U.S. stocks, it’ll be interesting to see, as Europe sinks deeper into an economic quagmire, whether there’s enough greed and stupidity left on Wall Street to award Facebook’s May 18 IPO a $100 billion valuation.

***


-- Posted Monday, 7 May 2012 | Digg This Article | Source: GoldSeek.com

comments powered by Disqus



 



Increase Text SizeDecrease Text SizeE-mail Link of Current PagePrinter Friendly PageReturn to GoldSeek.com

 news.goldseek.com >> Story

E-mail Page  | Print  | Disclaimer 


© 1995 - 2019



GoldSeek.com Supports Kiva.org

© GoldSeek.com, Gold Seek LLC

The content on this site is protected by U.S. and international copyright laws and is the property of GoldSeek.com and/or the providers of the content under license. By "content" we mean any information, mode of expression, or other materials and services found on GoldSeek.com. This includes editorials, news, our writings, graphics, and any and all other features found on the site. Please contact us for any further information.

Live GoldSeek Visitor Map | Disclaimer


Map

The views contained here may not represent the views of GoldSeek.com, Gold Seek LLC, its affiliates or advertisers. GoldSeek.com, Gold Seek LLC makes no representation, warranty or guarantee as to the accuracy or completeness of the information (including news, editorials, prices, statistics, analyses and the like) provided through its service. Any copying, reproduction and/or redistribution of any of the documents, data, content or materials contained on or within this website, without the express written consent of GoldSeek.com, Gold Seek LLC, is strictly prohibited. In no event shall GoldSeek.com, Gold Seek LLC or its affiliates be liable to any person for any decision made or action taken in reliance upon the information provided herein.