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View Full Version : Euro Declines, After $1 Trillion ‘Bailout’



Apocalypse
05-11-2010, 12:11 PM
May 11, 2010

BERLIN/LONDON (Reuters) – Germany’s cabinet approved the biggest national contribution to a $1 trillion emergency rescue package intended to stabilize the euro as global markets sobered up after Monday’s euphoria.

Relief at the European Union’s bold move to restore investor confidence gave way on Tuesday to doubts about whether weaker euro zone economies can meet their part of the bargain and deliver drastic debt cuts, driving the euro and stocks lower.

The 16-nation single currency, which surged above $1.30 early on Monday, slipped below $1.27 as traders weighed debt worries and a perceived blow to the European Central Bank’s independence in its weekend policy reversal to start buying euro zone government bonds.

The emergency plan — the biggest since G20 leaders threw money at the global economy following the collapse of Lehman Brothers in 2008 — wowed markets with its sheer size and sparked a spectacular rally in world stocks and the euro.

Yet stock and bond markets turned cautious when they reopened for business in Asia and Europe on Tuesday, with investors concerned that the plan was not a long-term solution to problems plaguing the 11-year old single currency area.

EU Economic and Monetary Affairs Commissioner Olli Rehn raised pressure on Italy, which has the euro zone’s highest debt after Greece as a proportion of national output, and France, which has a heavy structural budget deficit, to do more quickly to improve their public finances…

Conservative newspapers and the Social Democratic opposition reflected public anger and fears over the latest bailout, warning that Berlin could not trust its euro zone partners and may end up having to foot the entire bill.

"What happens if other countries which get aid from the package drop out? Will the German share increase then?" SPD parliamentary whip Thomas Oppermann asked on ARD television.

The mass-circulation Bild daily complained in a front-page headline: "We are Europe’s fools again."

"Angela Merkel, the Iron Chancellor, has rolled over and we are being taken to the cleaners," it compained [sic] in an editorial…

Moody’s credit ratings agency warned it might downgrade Portugal’s debt rating and further cut Greece’s to junk status, noting the contagion effect of Greece’s crisis on other euro zone members.

"Contagion has spread from Greece — historically a weaker credit in the context of the euro zone — to sovereigns with stronger credit metrics like Portugal, Ireland and Spain," Moody’s said…

http://news.yahoo.com/s/nm/20100511/bs_nm/us_eurozone

Gee could investors be concerned with a bailout package 10x larger then what was expected, signaling things are far worse then thought?

Get ready to watch the domino effect in Europe.

lacarnut
05-11-2010, 12:50 PM
Even though my gold, silver investments are going up, I am not too happy about the US bankrolling 20% of the IMF funds.There is no telling what the Feds are doing to pump money into bailing out Greece. We have allready pissed away billions by bailing out European banks. Pretty soon our money will not be worth shit.

Tecate
05-11-2010, 11:11 PM
Even though my gold, silver investments are going up, I am not too happy about the US bankrolling 20% of the IMF funds.There is no telling what the Feds are doing to pump money into bailing out Greece. We have allready pissed away billions by bailing out European banks. Pretty soon our money will not be worth shit.
It's quickly approaching the point where we should start thinking in terms of how many ounces of precious metals we have instead of their value in dollars. All fiat currencies worldwide are losing value against gold.