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By Monty Guild & Tony Danaher, on May 27th, 2010
THE NEW ECONOMIC REALITY THE DE-LEVERAGING OF THE DEVELOPED WORLD WILL CONTINUE FOR ANOTHER DECADE There is too much debt throughout the developed economies, and not enough growth to service that debt.
Phase I – Japan About twenty years ago the giant real estate and stock market bubble in Japan began to deflate. At its peak, Japanese real estate was so overvalued that the Imperial Palace grounds in Tokyo, which is 0.7 square miles, had a value greater than the entire state of California which has 163,600 square miles. When compared to the U.S. and European stock markets, the . . .
Continue Reading: THE NEW ECONOMIC REALITY PART I
By Monty Guild & Tony Danaher, on May 21st, 2010
TAKE YOUR PICK – A TALE OF TWO ECONOMIC TRENDS
The developed world is de-leveraging and Europe is moving toward deflation and depression. Meanwhile, the Chinese, Southeast Asian, and Indian-led developing world is growing and experiencing inflation. We will discuss both regions in this memo.
Restructuring the massive debts of European countries will begin within a few months. Greece and, in the longer term, some other European countries will default on debt and begin to de-lever their economies on the backs of those who were kind or foolish enough to lend them money. Portugal, Spain, Ireland, and possibly Italy . . .
Continue Reading: TAKE YOUR PICK
By Monty Guild & Tony Danaher, on May 14th, 2010
THE EUROPEAN ECONOMIC CRISIS
Earlier this week, the markets cheered the announcement out of Europe of a bailout package by the European Union nations and the International Monetary Fund, and a decision by the European Central Bank to begin buying sovereign debt of weaker states. This bailout plan protects the sovereign bond markets for the short term, but does not solve any of the longer term problems in European bond, stock, and currency markets. In fact, they allow the problems to grow and fester without being addressed.
As we have repeatedly stated, the answer to the . . .
Continue Reading: HOLD ON TO YOUR GOLD
By Monty Guild & Tony Danaher, on May 6th, 2010
GREECE WILL RECEIVE A BAILOUT, AND THE BAILOUT WILL BE AIMED AT STRUCTURING FINANCIAL SECURITY FOR EUROPE AS A WHOLE
European financial officials from sixteen nations and some supra-national organizations met last weekend and announced that Greece will get a package of loans to be delivered to them over three years. Why is this happening? This is happening because if Europe does not support Greece, the government debt contagion that we have been discussing in recent memos will continue and spread. It will spread to Spain and Portugal and later to many countries in Europe including Italy and possibly . . .
Continue Reading: THE CURRENT MELT DOWN IN EUROPE IS CREATING SOME SPILL-OVER PANIC IN ALMOST ALL MARKETS, CREATING GOOD BARGAINS IN STOCKS, OIL, AND GOLD
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