The Economissed: A wise man once told me “You can lead a whore to culture but you can’t make her drink”
When it comes to politics the only thing that counts are the voting intentions of the electorate. If only the Eurozone had been able to put aside their differences to address the common issue of Sovereign Debt before it had reached the point of CDS explosion in France and 25% losses in Stock Markets.
Alas, Merkel decided that socializing losses will not happen on her watch and therefore continues to skim over the problem in total denial…..that despite the fact that the Landesbanks were lending to the leverage community, naive enough to believe the AAA rating at a time when the smart money knew exactly what was going on. Now that the chickens are roosting in her back yard she’s made the decision to go on holiday….if only she’d gone to Rhodes…this, as always, a good read from Mr Lewis…
Nicholas (I love the limelight) Sarkozy decided to do what the politicians do best and invited the BdeF to the weekly ministers meeting at the Palace to no doubt pretend to be getting ahead of the curve. By the time they had left the room rumours the had started & within hours Soc Gen was -20% and the French market had doubled on CDS relative to their German neighbours…..what actually came out of the meeting? Shhhh…..that’s top secret! (Osborne said he’d show Balls yday – expect another EU plaster).
So, the Credit Crisis (although no one really admitting it) has morphed in to a Central Bank Crisis & one could assume that this would always have been the case given the herding of bad loans on to their books….but clearly it needn’t have been. There has been plenty of time which the Politicians have simply wasted. The US had been on negative watch yet Tiger Tim chose to ignore the writing on the wall? This from our dear friend Tom at www.goldmadesimple.com is as good a sum up as any – it’s Economic Confidence Stoooopid!….paper money, put simply, has an intrinsic value + a whole load of good will (unless Eco- Fascism is employed but that’s another universe…right?)
I suggested y’day it was worth tracking German 2yr yields (charts p2) as Demark, Wave Counts & trend channels come in to play just above the al time lows, not that the techs have played a big role recently but these levels now are key. With the overnight ban in short-selling (please…..quite pathetic) the authorities are throwing their toys around again but if we can not hold on to these levels then it really starts to look quite dire – and confidence, already severely dented by the EU politicos will not be recovering any time soon. In fact, Germany may well suffer further, this interesting from 13 D research: “Top German companies threaten to leave Germany over higher energy prices– a harbinger of a new economic reality. Founded as a chemical company in 1863, Bayer AG began curing headaches with its 1899 introduction of aspirin. Now, in a gripping reminder of the importance of inexpensive and reliable energy, Bayer is foreshadowing new headaches in its motherland: the diversified giant is threatening to relocate operations from Germany to countries with more favorable energy policy and growth.”
As usual Gold benefits from just about everything – how wrong all those experts all were calling it worthless over the previous decade, and many continue to do so. As regular readers will know it’s been a favourite of mine ever since the then Iron Pyrite Chancellor Brown flogged all ours below $300 – but again – Germany could prove important as they have not sold any of theirs and it would come in handy to pay their neighbours’ bills one would think….Lewis: “the senior official at the Bundesbank told me they already have thought about it….We have 3,400 tons of gold,” he said. “We are the only country that has not sold its original allotment from the late 1940s. So we are covered to some extent.” …. have a super weekend…Paul.
A look at the German two year – yields set to rise?
The Economissed is produced by Paul Wiggins head of Futures & Options at Market Securities in London.
Charts courtesy of Bloomberg
Related posts:
- As the UK is told to embrace austerity the government wants to give £10bn more annually to the IMF
- Culture Minister in Ancient Gold Bracelet Faux Pas
- Gold, A Wise Investment
- Gold Poised to Make History
- The Economissed: Hawks Casting Shadows
Link to this article: : http://www.goldmadesimplenews.com/markets/the-economissed-a-wise-man-once-told-me-%e2%80%9cyou-can-lead-a-whore-to-culture-but-you-cant-make-her-drink%e2%80%9d-4837/
Posted by Paul Wiggins on Aug 12 2011. Filed under Analysis, Markets.
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