Subscribe to Money Morning get daily headlines subscribe now! Money Morning Private Briefing today's private briefing
Category

Global Markets

The Future of the Euro: Why Europe's Key Currency is Doomed

The Eurozone project has seen better days, which is why the future of the euro isn't a bright one.

In fact, as all the latest speculation about Greece either abandoning the euro currency – or being booted out of the Eurozone outright – is demonstrating, "the market" is about to apply a level of pressure well beyond what the Eurozone and European Union (EU) were designed to handle.

The number of sovereign states in the EU that are facing difficulty selling new debt, or even a rollover of current debt, is growing.

The Eurozone and the EU are both in trouble. Clearly, the structure that exists today is flawed and will not withstand the rigors and pressures that are headed directly its way.

The ability to kick the can down the road is about to end, and with it some hard decisions will need to be made by the political and wealthy elite.

Let's take a closer look.

To see the newest Eurozone danger signal, please read on...

How Long Before Greece Leaves the Euro Zone?

I find it ironic that a country which defrauded its way into the Euro Zone is likely to be the first country to exit the Euro Zone. Despite a raft of hasty denials by just about everyone in Brussels, it now seems all but inevitable that Greece will bail on the Euro when they default on the €110 billion bailout they received just one year ago.

Of course, this all started on Friday when an article came out in Der Spiegel claiming that Greece was mulling an exit from the Euro due to near-daily violent protests and the apparent failure of austerity measures. An emergency meeting of European finance ministers was convened in Luxembourg in response to the report, which they all denied. Methinks they doth protest too much.

Read More…

Coal Use in China Shines Light on Growth

International coal prices hit $124 per ton last week, the highest level in five months, as strong demand from reconstruction projects in Japan and reduced supply from flood-ravaged Australia have made coal supply tight.

The floods in Queensland, Australia cut the country's output of coal by 15%; other big coal producers such as Indonesia, South Africa and Colombia are experiencing similar production cuts due to floods of their own.

At the end of March, coal prices were 33% higher than a year ago, and earlier this month mining giant Xstrata PLC (PINK: XSRAF) inked a one-year deal with a Japanese utility at $130 per ton, effectively setting a floor under coal prices in the near-term. That's up from $98 per ton the company made in a similar deal a year ago.

Perhaps no country is more affected by this development than China.

Read More…

Resurgent Greek Debt Crisis Stokes Concern, Causes S&P to Lower Rating

Concern that the Greek debt crisis is far from resolved led Standard & Poor's to lower that troubled country's debt rating even deeper into junk territory yesterday (Monday).

The S&P cut Greece to B from BB- with a warning it could downgrade further.

"In our view, there is increased risk that Greece will take steps to restructure the terms of its commercial debt, including its previously-issued government bonds," S&P said in a statement.

A restructuring of the Greek debt could result in principal reductions of 50% or more, with the loss borne by the bondholders.

One year after a bailout intended to help the Greek government address its crushing debt – it owes more than 150% of its gross domestic product (GDP) – European Union (EU) leaders are worried Greece is not doing enough to fix its debt problems.

Read More…

China's Economy Continues to Ascend – But Watch Out for Speed Bumps

Everyone knows that China's economy is hot. The only question is whether it may be a little too hot.

China posted yet another quarter of stellar economic growth in the first quarter of 2011, with its gross domestic product (GDP) growing 9.7%. However, analysts are worried about some of the side effects that have accompanied that growth- namely soaring inflation and the emergence of speculative bubbles.

Inflation in China hit a 32-month high in March, and the country's real estate market is beyond scorching.

Policymakers in Beijing insist they have the situation under control, and they've been trying to rein in liquidity and curb speculation to prove it. That's why China's economy, accustomed to double-digit growth, is only expected to grow 8% to 9% this year.

Read More…

The Coming Bond Market Collapse: Three Ways to Dodge the Damage

We're on a collision course with the worst bond market collapse in decades.

The warning signs are as clear as day.

There's still time to dodge the damage – and even to profit – if you know what to look for.

But the time to make your move is now…

To understand the three moves to make now, please read on...

How to Profit if the Nigeria Elections Drive Up Oil Prices

Oil prices are on the rise for a bevy of reasons – soaring demand in emerging markets, the weak dollar, and a strengthening U.S. recovery, to name a few.

However, supply disruptions and civil unrest in the Middle East-North Africa (MENA) region in recent months have had the biggest impact on oil prices. Egypt, Libya and Yemen have all played a part in driving up oil prices, and now they're about to be joined by another volatile oil producer.

I'm talking about Nigeria.

Read More…

Canada: Investing in the World's Safest Economy Can Put Profits in Your Pocket

When a March 25 "no-confidence" vote toppled the government of Canadian Prime Minister Stephen Harper, it also set the stage for a new general election.

This May 2 election will be Canada's third in five years and fourth in seven years. In light of the civil unrest in the Middle East/North Africa (MENA) region – not to mention the financial problems that continue to plague Europe – it would be understandable if global investors added Canada to the "do not invest" list.Money Morning Quarterly Report

But don't make that mistake: Our neighbor to the north remains one of the most stable big-market profit plays on the planet today.

Some investors even refer to it as the "world's safest economy." And with good reason.

For four ways to profit from the world's "safest economy," please read on...

Buy, Sell or Hold: Suncor (NYSE: SU) Energy Inc. Is an Oil Gusher with Limited Risk

If you are looking for a mining company that generates energy with its own diversified refinery division, wholly owned pipelines, and a retail gas station network, then Suncor Energy Inc. (NYSE: SU) should be at the top of your list.

Here are just a few reasons why:

  • Suncor offers diverse and reliable production at a time when civil unrest in the Middle East has increased uncertainty in the energy market.
  • It's leveraged to higher oil prices.
  • It's transparent
  • And it's reducing its debt.

There's no question about it: Suncor Energy Inc. is a "Buy" (**).

Read More…

China's Highway System Growth Paves the Way to a Stronger Economy

What some have called "the worst traffic jam in human history" happened on the Beijing-Tibet Highway in August 2010. It trapped some drivers for more than 20 days and stretched more than 60 miles (97 kilometers).

The mess was so severe that local residents turned into vendors and profited from selling water, noodles and nuts to stalled travelers.

The cause of the auto standstill was thousands of trucks transporting coal from Inner Mongolia's coal fields to power plants in Beijing's suburbs to satisfy the country's surging electricity demand. The lack of railways connecting the two regions often results in trucks crowding highways, and excessive road damage from heavy vehicles blocks parts of the highway from maintenance.

Read More…