It’s gonna be an interesting next 6 months or so; wait a minute, what am I thinkin’? We don’t have to wait that long; come May 15 the Greeks have to come up with a cool half a billion Euros to pay
investors who hold Greek bonds that didn’t go along with the bailout.
Add to that a new Greek Government that is made up of Neo-Nazis and God knows what else, and oh don’t forget France now has a socialist President, and you have the makings of the wheels coming off the goods.
Let’s not forget, however, it’s going to be all euphoria from the politicians down to zero. After all, when you go off a cliff, nothing really happens to you until you hit the ground; that’s when it hurts.
The implications of this weekend in Europe are enormous. Expect louder cries of nationalism, confiscation of wealth through higher taxes, more bailouts and giveaways to the masses, and ultimately markets to work lower; maybe much lower.
I wouldn’t be long European stocks or bonds if they gave them to me for free. Now, maybe that means the bottom is close at hand, but looking at the political landscape of Europe, all I see is 1930.
Gold’s initial reaction is one of indifference; opening lower and maintaining a tight range throughout the trading day. The problem I have with gold at the moment is threefold; 1) the daily chart pattern looks horrible, 2) it is the asset of choice to sell when people need to raise money, and 3) the Central Planners are the ever present 800 lb. gorilla in the room.
The sad fact is that the money printing will continue unabated in Europe, Japan, and of course the U.S. Markets will eventually sort these developments out, but it is going to be a very bumpy ride. Which country gets to zero first?
Not much has happened in the markets today; but not much happens in the eye of a hurricane either. Just wait.
Have a good day everyone.