Europe is facing a make-or-break month. Its economy is sinking and the debt crisis that has hit some of its members threatens global economic disaster. Now its central bank is poised to hold off from helping — in the hope that Europe's divided leaders will be pushed into action.
I just finished reading Nouriel Roubini's seven point analysis on the Bursting of the Gold Bubble in which Roubini's asks and answer the question "Gold skyrocketed to over $1,900 per ounce in the fall of 2011 from $800 in early 2009, but has since collapsed by around 27%. Why?"
I offer a point-by-point rebuttal.
Steen Jakobsen, chief economist of Saxo Bank in Denmark, asks via email: "Is Merkel Misinterpreted? Will the FOMC Move Decisively?"
The misunderstood Chancellor.
The market clearly believes Ms. Merkel will, ultimately, not withstand the pressure - and she will end up collateralizing rising debt. I remain extremely skeptical. I even dusted off my school German to read Der Spiegel and Focus, two major German weeklies, which give you a very different perspective.
The ECB has held off purchasing sovereign debt bonds in Europe the past two weeks and the results were easily predictable. Yield on 10-Year Italian debt is back over 7%.
Italy 10-Year Government Bond Yield
In a way, Europe should be thrilled that financial markets barely batted an eye at the crisis in Cyprus, which reached a bailout deal with the eurozone Sunday.
But Europe has a problem on its hands that’s bigger than Cyprus: The economy stinks.
In a way, Europe should be thrilled by the week that was because financial markets barely batted an eye at the crisis in Cyprus. But Europe has a problem on its hands that's bigger than Cyprus: the economy stinks.
TOKYO (Reuters) - Incoming Japanese Prime Minister Shinzo Abe kept up his calls on Tuesday for the Bank of Japan to drastically ease monetary policy by setting an inflation target of 2 percent, and repeated that he wants to tame the strong yen to help revive the economy.
MANY people have been linking to this Spiegel piece, on how the Germans are preparing for the possibility of a Greek default. It's a remarkable read. Consider:The rest of Europe is losing patience with Athens. And after 18 months of crisis in the country, there is still no improvement in sight. Key economic figures are worsening, and there are growing doubts over whether the Greek government truly understands how serious the situation is.