Europe Today
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 the idiots
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.
-vegas
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