Does the European Union (EU) bailout signal an end for the euro currency?
Investment icon Jim Rogers and lauded economist Nouriel Roubini think so.
And they may be right.
Eurozone governments were forced to spring into action on Sunday to defend the besieged euro. The currency has come under tremendous pressure as investors wonder if Greece's fiscal crisis will spread to other heavily indebted nations.
Greece's deficit-to-gross domestic product (GDP) ratio is a staggering 13.6%, but Greece is No. 2 on the list of over-spenders. No. 1 is Ireland, whose deficit-to-GDP ratio is 14.3%. Spain comes in third at 11.2%; and Portugal is fourth at 9.4%.
The euro in the past six months has dropped by about 17% against the dollar, as investors rushed to ditch the currency.
Eastern Europe Bailout
Article Index
Does the EU Bailout Signal the Euro's Demise?
How the Greece Bailout Turned Gold Into a 'Must-Have' Investment
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...
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...
Portugal's Credit Rating Downgrade Fuels Concern That Debt Contagion Will Spread
Fitch Ratings Inc. yesterday (Wednesday) cut Portugal's sovereign credit rating for the first time, fueling concern that the problems plaguing debt-laden Greece will spread to other Eurozone countries.
The credit ratings agency cut Portugal's credit grade by one notch to AA-, citing budgetary underperformance in 2009. Fitch warned that if the country doesn't enforce stricter fiscal discipline this year, another downgrade is possible.
"A sizeable fiscal shock against a backdrop of relative macroeconomic and structural weaknesses has reduced Portugal's creditworthiness," said Douglas Renwick, associate director at Fitch.
The news punished the euro, as traders placed bets that a European Union summit later this week won't be able to reach consensus on how or whether to help troubled Greece. The currency hit a 10-month low against the dollar.
Stock markets around the world have struggled in recent months as investors worried whether the trouble in Portugal, Greece, and other Eurozone countries would hamper the global economic recovery.
The credit ratings agency cut Portugal's credit grade by one notch to AA-, citing budgetary underperformance in 2009. Fitch warned that if the country doesn't enforce stricter fiscal discipline this year, another downgrade is possible.
"A sizeable fiscal shock against a backdrop of relative macroeconomic and structural weaknesses has reduced Portugal's creditworthiness," said Douglas Renwick, associate director at Fitch.
The news punished the euro, as traders placed bets that a European Union summit later this week won't be able to reach consensus on how or whether to help troubled Greece. The currency hit a 10-month low against the dollar.
Stock markets around the world have struggled in recent months as investors worried whether the trouble in Portugal, Greece, and other Eurozone countries would hamper the global economic recovery.
Beware of Eurozone Plans for Greek Debt Bailout
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.
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.
Eurozone Announces Greece Rescue Plan To Encourage Investor Confidence
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.
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.
Eastern Europe's Banks are Next in Line for a Bailout
By Martin Hutchinson Contributing Editor Money Morning We all know about the mess the United States, Britain, Spain and some other countries have gotten themselves into thanks to overenthusiastic housing bubbles. Investors who have studied the global trade figures lately are no doubt also aware that East Asian countries are in an entirely separate mess […]