It took a while…but the most clueless European is finally figuring out something the most clueless Americans have known for a year or two: They’ve been snookered.
Remember when Ben Bernanke told us that problems in the mortgage market were contained to the subprime sector? Then it became obvious they weren’t contained. But he promised they wouldn’t detonate the credit markets or take down major banks. And so on.
Europeans are living this right now, today. Leaders of the European Union assured them that problems in Greece would stay in Greece. Then the problems spread to Ireland. So EU leaders said if the Irish would just take a bailout, they’d come up with a plan to make sure nothing like this ever happened again.
This week, bond traders are calling their bluff. Yesterday, the yield on Spanish bonds grew from 5.21% to 5.46%. (It’s up again today, to 5.55%.)
Today, the yield on Italian bonds grew to 4.68%. The spread over similar German bonds – the benchmark of reliability – is its widest since 1997, when the euro was still a gleam in the eyes of central planners.
Credit default swaps on Irish debt, Portuguese debt, Spanish debt, Italian debt…they’ve all surged to record highs.
Thus, the euro has slid below $1.30 for the first time in two months. Not surprisingly, gold priced in euros hit a record of €1,059.
Priced in dollars, gold is looking pretty impressive too. The dollar index is merely firming up its position above 81…but gold has surged nearly $20, to $1,386. That’s within $40 of the record set just three weeks ago.
Dave Gonigamfor The Daily Reckoning
Dave Gonigam has been managing editor of The 5 Min. Forecast since September 2010. Before joining the research and writing team at Agora Financial in 2007, he worked for 20 years as an Emmy award-winning television news producer.
Oh David. Such short sightedness! It is America that is snookered, not the Euro!
This Euro “trouble” is only the US and UK MSMedia stirring the worlds attention away from YOUR $$$ problems!
Greece has 300 tons of Gold, Italy 2,500, France 2,500. California? 0 tons.
No David, not all of Europe is cowering before a few traders and a silly bit of market manipulation!
Infact, the European central bankers are just waiting to deploy their nuclear option if needed…then things will get really interesting…
May I humbly suggest some further reading for you??!
So, I guess we should all be hoarding gold (physical) now eh in preparation for the “event”…
Pingback: internal medicine Joshua A. Jacobi
Pingback: payday loan without checking account
Pingback: new york walking dead comic con
Pingback: golfing resources
Pingback: build android apps
Pingback: why not try these out
Pingback: amanda bynes hot
Pingback: get ageless male
Pingback: celebrity plastic surgery
Pingback: jimmy rose
Pingback: giochi casino online gratis
Pingback: slot machine bar
Pingback: work from home
Pingback: cheap driving lessons
Warren Buffett is a great investor. Perhaps the greatest investor in history. But the most impressive thing about Warren Buffett isn't his portfolio... It's convincing mom and pop investors he's just like them. Chris Mayer explains why this couldn't be further from the truth, and offers a warning to those who are vulnerable to The Oracle's folksy charm...
Cancer research has come a long way in a very short amount of time. But it still has a long way to go. Today, Ray Blanco explains why cancer research could make leaps and bounds in the coming years, and how early investors could make a fortune because of it. Read on...
The government's influence on the life of an average American citizen is simply staggering. At every turn there is a different "department" or "agency" with a different rule for how you must live your life. Today, John Pugsley offers 15 unique and peaceful ways to legally combat the government's influence on your daily life. Read on...
Thanks to a surge in development, new energy-efficient technologies are constantly changing the way people power their homes. And that's put the tried and true utility sector on the defensive. But while there are plenty of different alternative-energy sources that are pushing this trend forward, one clearly stands ahead of the rest. Greg Guenthner explains...
Thanks to the tireless efforts of the Federal Reserve, currency in circulation is up $72.5 billion in the last year - which equates to $234 for every man, woman and child in America. And after rifling through his wife's purse yielded fruitless results, The Mogambo Guru has launched an all-out investigation to find his share. Read on...