Look at Greece, think of Spain

While most analysts are looking at the Greece theater, the real and much bigger problem is rising in Spain. After series of stupid political decisions, with most important of them - stopping the even not started reforms, the country as expected is heading a catastrophe. The interest on 10-year bonds rose again to 6,5%, that with the enormous Spanish debt means almost a default. Instead of making reforms and cutting spending the prime minister Rajoi is just praying on the icon of Draghi to start printing money.


Does Greece has any chance?

Most of media and journalists are now concentrated on whether in Greece a new government will be created to implement the saving plan. But I think this is not the main question. The main question is if generally Greece has any chance of being saved. I don't think so. The entire Greek "reforms" are just an agony for both sides - Greece and its EU-partners pouring thousands of billions of Euros in the troubled country.


John Galt kidnapped a new US man of success

The co-founder of the Facebook Eduardo Saverin decided to cancel its American citizenship and to live for a long time in Singapore. The decision is just before the Facebook IPO that if successful will make him an official billionaire. And also - a big taxpayer to comrade Barack Obama - secretary general of the Socialist States of America... :)


Spanish Bankia - a new bank+government perpetuum mobile

Today Spain announced it will nationalize its 3rd largest bank - Bankia. The government is preparing an injection of public funds (4,5 billion Euros = $5,8 billion) into the banking group in an effort to revive the confidence in banking system. In exchange it will get a 45% stake in the bank that holds 38 billions of euros of home estate loans. Half of them are problematic after the real estate bubble burst. It is expected the all money that is to be injected to reach 10 billion euros.


If the Gold fall was real, why is the Swiss Franc stable?

As from Monday the Gold has lost $60 per troy ounce or about 3,7% of its value. Measured in Euro the loss is smaller as one of the main reasons of the decline at Gold is strengthening the dollar. Some analysts has already started to talk about the "gold bubble burst". But let us be honest. A gold bubble has never existed. There is just a bubble of newly printed paper-money. In fact the gold price rise even lags the increase in global money supply. Of course there will always be manipulations especially having in mind that the most of the trade is with "paper-gold", while the real gold market is something much different. Manipulations can not last long, as the market always wins. But it is normal to manipulate. In all inflation times the government tried to manipulate the gold. In 1933 in USA they even confiscated the gold.


Spain and Italy will be the first victims of France's left gamble

With Hollande crushing Sarkozy in France and with a new chaotic parliament in Greece, two more destabilizing factors are added to the deeply troubled European Union. It is not clear how real were the promises of Hollande in France and if he will really turn the country left. It is possible a socialist government to be pressed to make austerity reforms, just as this happened with PASOK government of Papandreou in Greece. Anyway electing a left president that promises to re-negotiate the EU fiscal pact and dreams of ECB printing more money, is a choice that will at least frighten the markets. There will be also parliamentary elections in June. As France is a semi-presidential republic where Parliament can remove the government from power, this can create additional uncertainty. Up to now Sarkozy was strong because he has also a majority in Parliament.


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