Best of the Week
Most Popular
1. Stock Markets and the History Chart of the End of the World (With Presidential Cycles) - 28th Aug 20
2.Google, Apple, Amazon, Facebook... AI Tech Stocks Buying Levels and Valuations Q3 2020 - 31st Aug 20
3.The Inflation Mega-trend is Going Hyper! - 11th Sep 20
4.Is this the End of Capitalism? - 13th Sep 20
5.What's Driving Gold, Silver and What's Next? - 3rd Sep 20
6.QE4EVER! - 9th Sep 20
7.Gold Price Trend Forecast Analysis - Part1 - 7th Sep 20
8.The Fed May “Cause” The Next Stock Market Crash - 3rd Sep 20
9.Bitcoin Price Crash - You Will be Suprised What Happens Next - 7th Sep 20
10.NVIDIA Stock Price Soars on RTX 3000 Cornering the GPU Market for next 2 years! - 3rd Sep 20
Last 7 days
The Copper/Gold Ratio Would Change the Macro - 21st Oct 20
Are We Entering Stagflation That Will Boost Gold Price - 21st Oct 20
Crude Oil Price Stalls In Resistance Zone - 21st Oct 20
High-Profile Billionaire Gives Urgent Message to Stock Investors - 21st Oct 20
What's it Like to be a Budgie - Unique in a Cage 4K VR 360 - 21st Oct 20
Auto Trading: A Beginner Guide to Automation in Forex - 21st Oct 20
Gold Price Trend Forecast into 2021, Is Intel Dying?, Can Trump Win 2020? - 20th Oct 20
Gold Asks Where Is The Inflation - 20th Oct 20
Last Chance for this FREE Online Trading Course Worth $129 value - 20th Oct 20
More Short-term Stock Market Weakness Ahead - 20th Oct 20
Dell S3220DGF 32 Inch Curved Gaming Monitor Unboxing and Stand Assembly and Range of Movement - 20th Oct 20
Best Retail POS Software In Australia - 20th Oct 20
From Recession to an Ever-Deeper One - 19th Oct 20
Wales Closes Border With England, Stranded Motorists on Severn Bridge? Covid-19 Police Road Blocks - 19th Oct 20
Commodity Bull Market Cycle Starts with Euro and Dollar Trend Changes - 19th Oct 20
Stock Market Melt-Up Triggered a Short Squeeze In The NASDAQ and a Utilities Breakout - 19th Oct 20
Silver is Like Gold on Steroids - 19th Oct 20
Countdown to Election Mediocrity: Why Gold and Silver Can Protect Your Wealth - 19th Oct 20
“Hypergrowth” Is Spilling Into the Stock Market Like Never Before - 19th Oct 20
Is Oculus Quest 2 Good Upgrade for Samsung Gear VR Users? - 19th Oct 20
Low US Dollar Risky for Gold - 17th Oct 20
US 2020 Election: Are American's ready for Trump 2nd Term Twilight Zone Presidency? - 17th Oct 20
Custom Ryzen 5950x, 5900x, 5800x , RTX 3080, 3070 64gb DDR4 Gaming PC System Build Specs - 17th Oct 20
Gold Jumps above $1,900 Again - 16th Oct 20
US Economic Recovery Is in Need of Some Rescue - 16th Oct 20
Why You Should Focus on Growth Stocks Today - 16th Oct 20
Why Now is BEST Time to Upgrade Your PC System for Years - Ryzen 5000 CPUs, Nvidia RTX 3000 GPU's - 16th Oct 20
Beware of Trump’s October (November?) Election Surprise - 15th Oct 20
Stock Market SPY Retesting Critical Resistance From Fibonacci Price Amplitude Arc - 15th Oct 20
Fed Chairman Begs Congress to Stimulate Beleaguered US Economy - 15th Oct 20
Is Gold Market Going Back Into the 1970s? - 15th Oct 20
Things you Should know before Trade Cryptos - 15th Oct 20
Gold and Silver Price Ready For Another Rally Attempt - 14th Oct 20
Do Low Interest Rates Mean Higher Stocks? Not so Fast… - 14th Oct 20
US Debt Is Going Up but Leaving GDP Behind - 14th Oct 20
Dell S3220DGF 31.5 Inch VA Gaming Monitor Amazon Prime Day Bargain Price! But WIll it Get Delivered? - 14th Oct 20
Karcher K7 Pressure Washer Amazon Prime Day Bargain 51% Discount! - 14th Oct 20
Top Strategies Day Traders Adopt - 14th Oct 20
AMD is KILLING Intel as Ryzen Zen 3 Takes Gaming Crown, AMD Set to Achieve CPU Market Dominance - 13th Oct 20
Amazon Prime Day Real or Fake Sales to Get Rid of Dead Stock? - 13th Oct 20
Stock Market Short-term Top Expected - 13th Oct 20
Fun Stuff to Do with a Budgie or Parakeet, a Child's Best Pet Bird Friend - 13th Oct 20
Who Will Win the Race to Open a Casino in Japan? - 13th Oct 20
Fear Grips Stock Market Short-Sellers -- What to Make of It - 12th Oct 20
For Some Remote Workers, It Pays to Stay Home… If Home Stays Local - 12th Oct 20
A Big Move In Silver: Watch The Currency Markets - 12th Oct 20
Precious Metals and Commodities Comprehensive - 11th Oct 20
The Election Does Not Matter, Stick With Stock Winners Like Clean Energy - 11th Oct 20
Gold Stocks Are Cheap, But Not for Long - 11th Oct 20
Gold Miners Ready to Fall Further - 10th Oct 29
What Happens When the Stumble-Through Economy Stalls - 10th Oct 29
This Is What The Stock Market Is Saying About Trump’s Re-Election - 10th Oct 29
Here Is Everything You Must Know About Insolvency - 10th Oct 29
Sheffield Coronavirus Warning - UK Heading for Higher Covid-19 Infections than April Peak! - 10th Oct 29
Q2 Was Disastrous. But What’s Next for the US Economy – and Gold? - 9th Oct 20
Q4 Market Forecast: How to Invest in a World Awash in Debt - 9th Oct 20
A complete paradigm shift will make gold the generational trade - 9th Oct 20
Why You Should Look for Stocks Climbing Out of a “Big Base” - 9th Oct 20
UK Coronavirus Pandemic Wave 2 - Daily Covid-19 Positive Test Cases Forecast - 9th Oct 20
Ryzen ZEN 3: The Final Nail in Intel's Coffin! Cinebench Scores 5300x, 5600x, 5800x, 5900x 5950x - 9th Oct 20

Market Oracle FREE Newsletter

How to Get Rich Investing in Stocks by Riding the Electron Wave

At Long Last the Euro Is Finally Being Saved

Politics / Euro Jul 02, 2012 - 06:03 AM GMT

By: Christopher_Quigley

Politics Best Financial Markets Analysis ArticleFriday the 29th of June 2012 will go down as one of the most important dates in the history of the Euro
currency. In the early hours of that fateful morning German resistance to a rational and comprehensive
resolution to the Euro crisis was finally crushed. It will take some time for the full implications of this
historic result to filter through to the markets but the fact that the dark cloud of dissolution of the Euro is
now passing can only be positive.



What happened? Why did Angel Merkel the German Chancellor finally "blink in earnest" as suggested in
our article two weeks ago? The answer is she was outmanoeuvred by Italy and Spain with the tacit
support of France. In essence she was totally isolated. Here is what SPIEGEL the German online
newspaper had to say about events:

"Angela Merkel took a tough stance ahead of the EU summit, insisting she would not make concessions.
But Italy and Spain broke the will of the iron chancellor by out-negotiating her in the early hours of
Friday morning. Germany caved in to demands for less stringent bailouts and direct aid to banks.

The key to getting your way in tough negotiations, of course, is to find your opponents Achilles' heel.
Italian Prime Minister Mario Monti and Spanish Prime Minister Mariano Rajoy did that on Thursday
night and early Friday morning in Brussels. And the result is a euro-zone agreement to allow the
common currency bailout funds to give direct help to ailing banks and to become active on
sovereign bond markets to provide relief on the financial markets -- free of conditions for the
countries in need of such aid.

With good reason Monti emerged from the late-night negotiations as a clear victor, having broken
Chancellor Angela Merkel's resistance. Monti together with Spanish Prime Minister Mariano Rajoy
secured easier access to the permanent euro-zone bailout fund, the European Stability Mechanism (ESM).
Euro-zone member states which fulfill the budgetary rules laid down by the European Commission
can now receive aid without agreeing to tough additional austerity measures. Strict oversight by the
troika of the European Commission, European Central Bank (ECB) and International Monetary
Fund (IMF) would no longer apply.

The agreement will allow the ESM to recapitalize troubled banks directly instead of loaning the bailout
aid to national governments in exchange for austerity commitments. That model had been called into
question after the EU agreed recently to provide Spain with €100 billion to prop up its struggling banks.
Investors, however, became nervous about Madrid's ability to shoulder that debt, and interest rates on
Spain's sovereign bonds had skyrocketed in recent weeks.

In addition, emergency aid funds will in the future be made available to stabilize the bond markets
without requiring countries, providing they are complying with EU budget rules, to adopt additional
austerity measures. Prior to the summit, Merkel had been against both steps, preferring to stick to
the rules that had already been hammered out and guaranteeing strict oversight."

From my own perspective it is astonishing that it has taken so long for the twin elements of the crisis to
be identified and segregated. Up until now, under German insistence, they had been joined at the hip.
What do I mean by this? Well prior to Friday the 29th Dr. Merkel was insisting that any assistance to
banks must go through Governments. Badly needed banking bailouts from the ECB were thus being
added to sovereign debt balances. These growing debt levels were affecting sovereign bond costs making
raising money in the markets prohibitively expensive. This increased expense was bloating day to day
government running costs despite the fact that "austerity" measures were being demanded by Germany.
The whole cycle was deflationary, self defeating and illogical. Friday's agreement changed this nonsense
and in summary has brought about two important "game changing" initiatives:

1. Banks can receive bailout funds from the ESM without affecting sovereign borrowing levels.

2. The new ESM fund can buy sovereign bonds directly thus lowering state borrowing costs.

As a result the risk of banking failure has been diminished and governments will be able to raise funds at
reasonable rates when the need arises.

Now by no means am I suggesting that everything about the Euro crisis is behind us but using the words
of Churchill: "now this is not the end. It is not even the beginning of the end. But it is, perhaps, the
end of the beginning".

Finally the banking aspect of the problem has been separated from the sovereign bond element of the
crisis. Why the process to identify and solve this fatal flaw in Euro policy has been so tortuous I will
never know but better late than never I say. Politicians can now go on summer vacation happy that when
they return in September a template in now in place upon which to build a secure and stable structure for
the future maintenance of the Euro currency. They will thus be in a position to remove for once and for all
the market risk of a potential demise of the Euro and with it a total collapse of the economies of the
fledgling European Community. Such a prospect was incomprehensible and as a result of Friday's action
by the European governments I think we can start to put this threat behind us. Will Mr. Market agree?
That remains to be seen.

(C) 2nd July 2012 Christopher M. Quigley B.Sc., M.M.I.I., M.A.

By Christopher M. Quigley

B.Sc., M.M.I.I. Grad., M.A.
http://www.wealthbuilder.ie

Mr. Quigley was born in 1958 in Dublin, Ireland. He holds a Bachelor Degree in Accounting and Management from Trinity College Dublin and is a graduate of the Marketing Institute of Ireland. He commenced investing in the stock market in 1989 in Belmont, California where he lived for 6 years. He has developed the Wealthbuilder investment and trading course over the last two decades as a result of research, study and experience. This system marries fundamental analysis with technical analysis and focuses on momentum, value and pension strategies.

Since 2007 Mr. Quigley has written over 80 articles which have been published on popular web   sites based in California, New York, London and Dublin.

Mr. Quigley is now lives in Dublin, Ireland and Tampa Bay, Florida.

© 2012 Copyright Christopher M. Quigley - All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any trading losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors before engaging in any trading activities.

Christopher M. Quigley 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