PIIGS and gold (Barrons)
RedTiger
Posts: 5,608 ✭
from
http://online.barrons.com/article/SB126353657002329483.html?mod=BOL_hpp_dc
link
>>
These are the PIIGS of Europe -- Portugal, Italy, Ireland and Spain -- and most particularly the Hellenic Republic. As part of the European Monetary Union, their adoption of the euro has precluded their past easy out of devaluation.
... the PIIGS are forced to conform to the monetary orthodoxy of the European Central Bank. ...
Writing in its Market Intellect research note, Michael Thompson, S&P's managing director of Market, Credit and Risk Strategies, and Robert Keiser, senior director of the unit, contend the strength of gold reflects concerns about sovereign debt and inflation.
...
>>
http://online.barrons.com/article/SB126353657002329483.html?mod=BOL_hpp_dc
link
>>
These are the PIIGS of Europe -- Portugal, Italy, Ireland and Spain -- and most particularly the Hellenic Republic. As part of the European Monetary Union, their adoption of the euro has precluded their past easy out of devaluation.
... the PIIGS are forced to conform to the monetary orthodoxy of the European Central Bank. ...
Writing in its Market Intellect research note, Michael Thompson, S&P's managing director of Market, Credit and Risk Strategies, and Robert Keiser, senior director of the unit, contend the strength of gold reflects concerns about sovereign debt and inflation.
...
>>
0
Comments
roadrunner
<< <i>Thanks for the link RT. PIIGS? Well, it's only a matter of time before someone comes up with a not so flattering acronym for our troubled states.
roadrunner >>
I like this one, STUPID---Spain, Turkey, Ukraine, Portugal, Ireland, Dubai.
Knowledge is the enemy of fear
Who knew that the PIIGS would become one of the more dominant financial stories for the next year, possibly for the next several years?
Probably everyone read it but didn't know what to do with it. Still don't.
"I still think the USA is in as bad as shape if not worse."
Well, with Greece for example, their national debt is 1.5X GNP. With US, it's only 1:1. The other interesting bit is that we buy most of our own debt, in fact, we own more of our own debt than anyone else. This sends the mind reeling when considering questions like "Do we have to pay ourselves back?" If you consider your household budget and you borrow next months pay (1:1), how do you pay your bills next month? Do you end up in a constant debt covering cycle? What happens if something happens? It's never a problem until there's a problem.
Likely the US will be on the hook for a good part in the PIIGS bail-out; an exercise in transferring their government debt to our government debt using the argument that contagion will bring our tbtf banks down if we don't. Then there's the problem that this debt has been sliced and diced with derivitives and default insurance and fractional reserve banking...you know, if any of this represented Ben Franklinesque sound financial management then there would be an opportunity to debate alternatives but what we have here is a complete mess that is not coherent enough to discuss. It not only does not make any sense, it scares the heck out of anyone that is actually financially responsible with their own resources because we know what being in debt to yourself represents.
Got GOLD?
Knowledge is the enemy of fear
Sorry, had to vent
I also see nothing political or correct about it.
Knowledge is the enemy of fear
And U.S. debt is growing very rapidly.....FAR outpacing GDP. Just 5 short years ago we had a debt of only 65% of GDP. Today we are over 100%. Just 5 years from now.....who knows? But if we continue at the current rate of increase, we will hit 150%, or 1.5x ourselves by 2016.