Best of the Week
Most Popular
1. Gold vs Cash in a Financial Crisis - Richard_Mills
2.Current Stock Market Rally Similarities To 1999 - Chris_Vermeulen
3.America See You On The Dark Side Of The Moon - Part2 - James_Quinn
4.Stock Market Trend Forecast Outlook for 2020 - Nadeem_Walayat
5.Who Said Stock Market Traders and Investor are Emotional Right Now? - Chris_Vermeulen
6.Gold Upswing and Lessons from Gold Tops - P_Radomski_CFA
7.Economic Tribulation is Coming, and Here is Why - Michael_Pento
8.What to Expect in Our Next Recession/Depression? - Raymond_Matison
9.The Fed Celebrates While Americans Drown in Financial Despair - John_Mauldin
10.Hi-yo Silver Away! - Richard_Mills
Last 7 days
Stock Market Trend Forecast 2020 - Trend Analysis - Video - 19th Jan 20
Stock Trade-of-the-Week: Dorchester Minerals (DMLP) - 19th Jan 20
INTEL (INTC) Stock Investing in AI Machine Intelligence Mega-trend 2020 and Beyond - 18th Jan 20
Gold Stocks Wavering - 18th Jan 20
Best Amazon iPhone Case Fits 6s, 7, 8 by Toovren Review - 18th Jan 20
1. GOOGLE (Alphabet) - Primary AI Tech Stock For Investing 2020 - 17th Jan 20
ERY Energy Bear Continues Basing Setup – Breakout Expected Near January 24th - 17th Jan 20
What Expiring Stock and Commodity Market Bubbles Look Like - 17th Jan 20
Platinum Breaks $1000 On Big Rally - What's Next Forecast - 17th Jan 20
Precious Metals Set to Keep Powering Ahead - 17th Jan 20
Stock Market and the US Presidential Election Cycle  - 16th Jan 20
Shifting Undercurrents In The US Stock Market - 16th Jan 20
America 2020 – YEAR OF LIVING DANGEROUSLY (PART TWO) - 16th Jan 20
Yes, China Is a Currency Manipulator – And the U.S. Banking System Is a Metals Manipulator - 16th Jan 20
MICROSOFT Stock Investing in AI Machine Intelligence Mega-trend 2020 and Beyond - 15th Jan 20
Silver Traders Big Trend Analysis – Part II - 15th Jan 20
Silver Short-Term Pullback Before Acceleration Higher - 15th Jan 20
Gold Overall Outlook Is 'Strongly Bullish' - 15th Jan 20
AMD is Killing Intel - Best CPU's For 2020! Ryzen 3900x, 3950x, 3960x Budget, to High End Systems - 15th Jan 20
The Importance Of Keeping Invoices Up To Date - 15th Jan 20
Stock Market Elliott Wave Analysis 2020 - 14th Jan 20
Walmart Has Made a Genius Move to Beat Amazon - 14th Jan 20
Deep State 2020 – A Year Of Living Dangerously! - 14th Jan 20
The End of College Is Near - 14th Jan 20
AI Stocks Investing 2020 to Profit from the Machine Intelligence Mega-trend - Video - 14th Jan 20
Stock Market Final Thrust - 14th Jan 20
British Pound GBP Trend Forecast Review - 13th Jan 20
Trumpism Stock Market and the crisis in American social equality - 13th Jan 20
Silver Investors Big Trend Analysis for – Part I - 13th Jan 20
Craig Hemke Gold & Silver 2020 Prediction, Slams Biased Gold Naysayers - 13th Jan 20
AMAZON Stock Investing in AI Machine Intelligence Mega-trend 2020 and Beyond - 11th Jan 20
Gold Price Reacting to Global Flash Points - 11th Jan 20
Land Rover Discovery Sport 2020 - What You Need to Know Before Buying - 11th Jan 20
Gold Buying Precarious - 11th Jan 20
The Crazy Stock Market Train to Bull Eternity - 11th Jan 20
Gold Gann Angle Update - 10th Jan 20
Gold In Rally Mode Suggests Commitment of Traders (COT) Data - 10th Jan 20
Disney Could Mount Its Biggest Rally in 2020 - 10th Jan 20
How on Earth Can Gold Decline During the U.S. – Iran Crisis? - 10th Jan 20
Getting Your HR Budget in Line - 10th Jan 20
The Fed Protects Gamblers at the Expense of the Economy - 9th Jan 20
Last Chance to Get Microsoft Windows 10 for FREE! - 9th Jan 20
The Stock Market is the Opiate of the Masses - 9th Jan 20
Is The Energy Sector Setting Up Another Great Entry? - 9th Jan 20
The Fed Is Creating a Monster Bubble - 9th Jan 20
If History Repeats, Video Game Stocks Could Soar 600%+ - 9th Jan 20
What to Know Before Buying a Land Rover Discovery Sport in 2020 - 8th Jan 20
Stock Market Forecast 2020 Trend Analysis - 8th Jan 20
Gold Price at Resistance - 8th Jan 20
The Fed Has Quietly Started QE4 - 8th Jan 20
NASDAQ Set to Fall 1000pts Early 2020, and What it Means for Gold Price - 8th Jan 20
Gold 2020 - Financial Analysts and Major Financial Institutions Outlook - 8th Jan 20
Stock Market Trend Review - 8th Jan 20

Market Oracle FREE Newsletter

Nadeem Walayat Financial Markets Analysiis and Trend Forecasts

Eurozone Debt Crisis is Far From Over

Interest-Rates / Eurozone Debt Crisis Jun 20, 2012 - 11:21 AM GMT

By: Money_Morning

Interest-Rates

Best Financial Markets Analysis ArticleDr. Kent Moors writes: The Greek election last weekend has brought us a brief reprieve. The nation and the Eurozone have stepped back from the brink.

But the larger truth is that little has changed.

Yes, the Eurozone has survived its latest test, yet there is little indication where it will go from here. Considerable continental support for the common currency remains, and EU officials will soon introduce initiatives to consolidate banking and financial policy in the European Union.


Still, the problems keep mounting, and there is very little resolve to fix them.

At this point, a lot of actions (or lack of actions) could still upset the entire apple cart.

Greece must now form a government, gain widespread acceptance of tough austerity measures, and wrestle with widening unemployment, pension shortfalls, and reduced government services.

With prospects still looking bleak, the streets will not be any calmer, especially with more than 50% of the nation's youth without a job.

The pro-bailout New Democracy party and its leader, Antonis Samaras, now need to form a majority coalition. Samaras must start with the No. 2 vote winner, Alexis Tsipras and the far left "let-the-rest-of-Europe-go-to-hell" Syriza party.

Tradition requires that the primary vote earners discuss forming a government first. Tsipras may relent on using his newfound political strength in the interests of national unity, but I wouldn't count on it. The former communist student organizer has another agenda in mind.

Samaras and his conservatives will probably end up forming a government with the socialists. That is, itself, a clear statement on how disjointed European politics has become.

The other sick patient is Spain. Actually, what is happening there has been on the radar for some time.

With Spanish government 10-year yields above 7% in recent days, the bailout provided only a week ago now seems utterly insufficient.

It is becoming evident that the EU financial markets and a weakening banking sector will not be able to stem this rising tide.

Something more needs to be done.

The Myth of American Isolation from the Eurozone
Make no mistake.

All of the rhetoric floating around about how insulated the U.S. markets are becoming to the European debt crisis means very little. Yes, America is better situated and possesses a remarkable engine for generating return. However, if Europe starts to slide, the U.S. will be moving in tandem with it.

Global markets need a European fix, but any genuine solution is likely to take some time.

Still, there are some matters beyond dispute.

For one, despite the problems, European prospects (and thereby wide areas of investment elsewhere) are much worse off without the euro. Greeks may widely disagree as to what policy comes next, but polls consistently indicate that 80% of them want to remain in the Eurozone.

For another, looking at the widening interest rates and declining stock markets one country at a time fundamentally misses the point. The EU has reduced the meaning of national borders, especially when it comes to finance.

That means this is not a Greek crisis. Nor is it a Spanish, Italian, Irish, or Portuguese crisis.

This is a European-wide crisis.

And when a continental-wide currency exists, the fever will show up there. Unfortunately, the centralized apparatus to attend it is insufficient.

The focus now, therefore, is on the relationship between two very different institutions. The first is the European Central Bank, and the second is the European Council.

The ECB will need to inject additional liquidity into the Eurozone - and rather quickly at that. We may debate the overall propriety of stimulus projects, but without another dose now, Europe (and American) investment prospects are in for tough sledding.

The bank knows that, but it will resist for one simple reason that brings us back to my earlier point. Without resolve and a concerted plan of action, stimulus programs merely move money from one place to another, ultimately contributing little more than a rise in inflation.

ECB head Mario Draghi has already warned the EU that it should not expect his bank simply to cut checks (sorry, this is Europe; that should be "cheques"). He has moved the ball into another court.

He has framed it (quite rightly) as a European Council matter. That body comprises the heads of state from EU members, and they are set to meet again at the end of this month.

The EU has reached a crossroads. It survives (along with its common currency) only by further integration. Retaining the quaint nationalistic customs of European postage stamps is endearing, but whether they are standing in a crowd before the Parliament in Athens or in a Madrid unemployment line, the average citizen is exhausted.

And getting angry.

There is a reason that Tsipras catapulted to political prominence in Greece or François Hollande's Socialist Party followed up his presidential victory in France with a solid parliamentary majority in the other European election over the weekend.

The heads of state must act, and decisively. If they continue to debate how to most effectively throw one or another under the bus, we are in for a long and agonizing journey to a fractured Europe.

That development will hardly play well in Berlin, Paris, or Rome.

Or Peoria, for that matter.

Source :http://moneymorning.com/2012/06/20/eurozone-crisis-far-from-over/

Money Morning/The Money Map Report

©2011 Monument Street Publishing. All Rights Reserved. Protected by copyright laws of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including on the world wide web), of content from this website, in whole or in part, is strictly prohibited without the express written permission of Monument Street Publishing. 105 West Monument Street, Baltimore MD 21201, Email: customerservice@moneymorning.com

Disclaimer: Nothing published by Money Morning should be considered personalized investment advice. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized investent advice. We expressly forbid our writers from having a financial interest in any security recommended to our readers. All of our employees and agents must wait 24 hours after on-line publication, or after the mailing of printed-only publication prior to following an initial recommendation. Any investments recommended by Money Morning should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company.

Money Morning Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules