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How the Greece Bailout Turned Gold Into a 'Must-Have' Investment

By , Resource Specialist, Money Morning -

With so much uncertainty in the U.S. stock market - not to mention the debt-contagion concerns emanating from Greece and other European Union (EU) countries - it's more important than ever for investors to hold "hard assets," such as gold and other commodities.

In my view, what's happening in Europe is particularly important for investors to be aware of and understand. The so-called " shock-and-awe" bailout strategy undertaken by the EU and the International Monetary Fund (IMF) - which establishes a $1 trillion rescue package for member-countries facing financial crisis - will not be the answer.

To see how gold and other hard assets are becoming "must-have" investments, please read on...

To see how gold and other hard assets are becoming "must-have" investments, please read on...

The Eurozone Bailout Plan Puts a $962 Billion Price Tag on Saving the Euro – But Is It Finally Enough?

By , Associate Editor, Money Morning -

European Union (EU) finance ministers yesterday (Monday) announced a $962 billion (750 billion euros) Eurozone bailout package that rallied global markets with a drastic new attempt to prevent a euro collapse and contain the Greek debt crisis. European policy makers agreed to the massive effort in a 14-hour meeting Sunday, trying to beat the start […]

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$147 Billion Bailout Package for Greece Won't End European Debt Crisis

By , Contributing Writer, Money Morning -

In an effort to stabilize the widening European debt crisis, the International Monetary Fund (IMF), together with Eurozone countries, agreed to extend an unprecedented $147 billion (110 billion euro) bailout package to Greece in return for deep cuts to the country's budget.

Under the three-year agreement reached late Sunday, Greece would receive $105 billion (80 billion euros) in loans from other Eurozone members and $40 billion (30 billion euros) from the IMF. The planned rescue is the largest ever attempted by the IMF and a first for the 16-member Eurozone. It still requires final approval from national governments.

Also, the European Central Bank (ECB) said on Monday it would indefinitely accept the country's debt as collateral regardless of its credit rating. The ECB didn't release figures, but the value of Greek assets used as collateral in its liquidity-providing operations is thought to be worth tens of billions of euros.

Many observers felt the huge bailout was designed not only to support Greece, but to shore up confidence in the euro, which has come under fire by currency traders. Just a few weeks ago, EU countries offered only $40 billion (30 billion euros) to help Greece.

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Money Morning Mailbag: Readers Eager For Effective Financial Regulation

By , Associate Editor, Money Morning -

The Money Morning mailbag continues to overflow with reader thoughts and concerns regarding financial reform – which is finally making slow progress in Washington. After three failed attempts to bring a financial regulation bill to the floor this week, the Senate on Wednesday finally agreed to start debate.

Following is a collection of this week’s Money Morning reader comments on our articles regarding reform, inspired also by more news from the Securities and Exchange Commission case against Goldman Sachs Group, Inc. (NYSE: GS) as executives faced a Senate committee hearing.

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As Scary as it Seems, Greek Debt Crisis Won't Spawn Second Global Meltdown

By , Global Investing Specialist, Money Morning -

The Greek debt crisis is starting to display an uncanny resemblance to the subprime crisis that sank the U.S. housing market, sent the global economy into a tailspin and touched off the worst financial crisis since the Great Depression.

Indeed, Greece has behaved very much like a subprime country:

  • It has borrowed more money than it can possibly repay - all the while lying to everybody about its true state of affairs.
  • "Liar loans" have been made, in Greece's case, to enable the country to "cook the books" with regard to its budget deficits.
  • New problems continue to emerge - apart from the liar loans - making it impossible to be sure all the troubles have been unveiled.
  • And as was the case with the subprime-mortgage crisis, embattled Wall Street investment-banking-giant Goldman Sachs Group Inc. (NYSE: GS) appears to have been intimately involved in the business.
And the similarities don't end there.

To understand why the Greek debt crisis won't spawn another global financial crisis, please read on...

Greece's Action on Aid Package Fails to Quiet Threat of Debt Contagion

By , Contributing Writer, Money Morning -

A request by Greece to trigger a $60 billion rescue package has failed to quell turmoil surrounding the country's bonds - heightening concerns that the debt contagion will force the European Union (EU) to bail out the region's other heavily indebted nations.

Greece on Friday asked the International Monetary Fund (IMF) and European governments to fund the emergency aid package to help fend off default when debt payments come due next month.

But instead of stabilizing the markets, uncertainty about Germany's willingness to fund its portion of the package, along with the potential for more bailouts, raised the cost of insuring Greek debt against default to a new record.

The euro plummeted after briefly bouncing off a 12-month low of $1.32 against the dollar Friday.

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Greece Activates Emergency Bailout, Testing Financial Strength of Eurozone Countries

By , Associate Editor, Money Morning -

Greece on Friday officially asked to tap into a $60 billion (45 billion euro) emergency aid package after months of talks, setting into motion a bailout process that will put the financial strength of Eurozone nations to the test.

Greece Prime Minister George Papandreou called his debt-stricken country's economy a "sinking ship," as borrowing costs reached 12-year highs and recent austerity measures didn't rally the market support needed to save Greece.

"This is the moment. The time that was not granted to us by the markets will be given to us by the support of the Eurozone," Papandreou said.

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Is There an Ulterior Motive for Bailing Out Greece?

By , Contributing Writer, Money Morning -

Since back in December, when Fitch Ratings Inc. slashed its credit rating on Greece's debt to below investment grade for the first time in 10 years, there's been a mind-numbing flood of media coverage of that European country's debt crisis.

And yet, despite high-volume of high-level media coverage, none of the stories have picked up on a very basic - yet very key - fact...

The bailout being developed is as much for Germany as it is for Greece.

Let me explain ...

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How to Profit from the New Iranian Sanction

By , Global Energy Strategist, Oil & Energy Investor • @KentMoors_OEI -

Growing up in Massachusetts, my mother used to say, "Live long enough, and you'll see just about anything happen in politics."

And she was right.

A wrestler, a standup comic, several movie actors, and former sports figures have been elected to office; tea parties are back as a way of challenging leadership; even a disgraced former governor makes it onto "Celebrity Apprentice."

But she never saw this one coming - a U.S. sanctions move against Iran that may actually work... and make you some money in the process.

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Odds of IMF Bailout Increase as Greek Bond Prices Plummet

By , Contributing Writer, Money Morning -

Prices for Greek 10-year bonds plummeted to record lows today (Thursday) on speculation Europe's most troubled economy is about to unravel.

Economists expressed new doubts over the country's banks and short term funding plans and warned that recent developments now threaten to create a vicious cycle of bad news.

"The fear factor is beginning to creep in. In fact, it's galloping in," Neil Mellor, a senior currencies analyst at Bank of New York Mellon Corp. (NYSE: BK) in London told The Wall Street Journal.

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Money Morning Mailbag: Are We Headed for Over-Regulation?

By , Associate Editor, Money Morning -

As U.S. financial reform continues to be the focus of controversy and debate throughout the nation, it seems as if the same questions arise again and again: How much regulation is necessary to create a fair market? What can we learn from our previous banking policies? What does the future hold for lenders, borrowers and […]

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Treasury to Sell $7.7 Billion Stake in Citigroup in "Orderly and Measured Fashion"

By , Contributing Writer, Money Morning -

The U.S. Treasury Department said yesterday (Monday) that it plans to sell the government's $7.7 billion stake in Citigroup Inc. (NYSE: C) this year, bringing the bank one step closer to leaving the bailout program.

"Treasury intends to sell its Citigroup common shares into the market through various means in an orderly and measured fashion," the Treasury said in a statement. "The manner, amount and timing of the sales under the plan is dependent upon a number of factors."

The Treasury said it would use a "pre-arranged written trading plan," but did not elaborate further.

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Beware of Eurozone Plans for Greek Debt Bailout

By , Chief Investment Strategist, Money Map Report -

An old proverb dating back to the Trojan War tells us to "beware of Greeks bearing gifts."

Today, with the fate of the European euro and perhaps even the entire Eurozone region hanging in the balance - and Greece needing a bailout to avoid default on its massive public debt - a more-appropriate warning might be: "Beware of Greeks seeking gifts."

Unfortunately, European finance ministers are looking at a bailout proposal that would amount to little more than an outright gift.

And it's a gift that - in my opinion - should never be given.

To understand the risks posed by a bailout-plan for Greece, please read on.

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Eurozone Announces Greece Rescue Plan To Encourage Investor Confidence

By , Associate Editor, Money Morning -

Eurozone countries yesterday (Monday) drew up a rescue plan to safeguard the euro in case Greece defaults on its debt in the hopes of stabilizing its currency.

Broadcasting the fact that Greece's euro partners have drawn up an emergency loan strategy is meant to steady the bond markets and give investors confidence in Greece's ability to pull out of its debt crisis, analysts said. The decision also pressures Greece to rely on its own measures for resolution.

"The objective would not be to provide financing at average Eurozone interest rates, but to safeguard financial stability in the euro area as a whole," the European finance ministers said in a statement.

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European Bailout Fund Proposal … Just Another Bad Idea

By , Global Investing Specialist, Money Morning -

Has bailout mania finally reached Europe?

The 16 nations that make up the Eurozone are seriously exploring the creation of a "European Monetary Fund," a bailout fund that would help euro-member countries that can't pay their debts.

This has the potential to be a pretty good idea. If structured correctly, the EMF could provide the discipline and stability that the euro needs.

However, I'm not holding my breath: Given the EU's track record, the EMF bailout plan will most likely evolve into yet another slush fund for politicians - as well as a drag on the European economy.

History proves Europe's bailout-fund proposal is unworkable. Read on to see why...

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