June 2, 2012, 10:05 a.m. EDT
Currency crisis is coming
By Stephen Pope
Marketwatch.com
Well, it may be a more like a month than a week since François Hollande was elected president of France, but the tide sure has turned toward his anti-austerity view and against the views of German Chancellor Angela Merkel. It was clear that once Nicolas Sarkozy was ousted, the German hard line of fiscal discipline would be besieged on all sides.
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And yet while endlessly urging Germanic acquiescence, Monti claims he is a disciple of German budgetary rigor. So much for believing in fiscal discipline, as, on May 31, Monti told a Brussels conference that Merkel's vision of a stable economy:
“... risks being undermined because of a lack of promptness in setting up the necessary instruments to limit the contagion ...”
The strain and stress is clear to see, for not only are euro-zone markets having to manage their own issues; data have hardly looked hot from either China or the U.S. The bond markets offered a clear indicator of the fissures that are stayed open after more than two years of crisis:
o German two-year Schatz fell to yield -0.012%.
o EUR/USD /quotes/zigman/4867933/sampled EURUSD +0.13% briefly rose to 1.2417 after U.S. jobs data were weak, but it has slipped to 1.24.
o The five-year low for EUR/USD is 1.1979 (June 7, 2010). That level is going to be seen again.
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Too many envious eyes look at Germany with its solid record of exports and a positive balance on net foreign assets. But these, plus the superlow borrowing costs, have not been achieved overnight. They have been earned — go back and look at the policy known as "Agenda 2010."
On March 14, 2003, Chancellor Gerhard Schröder outlined three key areas that the agenda would focus on:
1. The economy.
2. The system of social security.
3. Germany's position on the world market.
More: http://www.marketwatch.com/story/currency-crisis-is-coming-2012-06-04?link=MW_TD_latest
Gold is $1,581/oz today. When it hits $2,000, it will be up 26.5%. Let's see how long that takes. - De 3/11/2013 - ANSWER: 7 Years, 5 Months
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