Large Sarge
26th May 2010, 08:35 AM
As Liquidations Take A Breather, Gold Resumes Upward Move Again
Submitted by Tyler Durden on 05/26/2010 08:50 -0500
Central Banks Eurozone Greece Gross Domestic Product Sovereign Debt
The events of the past several days by global central banks have had the primary goal of curbing wholesale asset liquidations. This is confirmed by the Bundesbank's statement earlier today that there is a risk of a debt spiral if "determined action is not taken." Ironically, even as various think tanks are pushing up GDP estimates for Europe, the BBK itself has said that "sovereign debt worries in the Eurozone would likely weigh on EMU growth going forward." By now everyone is used to such contradictions, however. “Without determined counter measures the danger exists — as observed in the case of Greece — of a spiral of rising risk premia and increasing debt, which in turn can be associated with negative effects on growth,†the bank wrote. Either way, with sovereign intervention, the market has managed to pause the constant sell off, which has benefitted one primary asset class. Gold.
Submitted by Tyler Durden on 05/26/2010 08:50 -0500
Central Banks Eurozone Greece Gross Domestic Product Sovereign Debt
The events of the past several days by global central banks have had the primary goal of curbing wholesale asset liquidations. This is confirmed by the Bundesbank's statement earlier today that there is a risk of a debt spiral if "determined action is not taken." Ironically, even as various think tanks are pushing up GDP estimates for Europe, the BBK itself has said that "sovereign debt worries in the Eurozone would likely weigh on EMU growth going forward." By now everyone is used to such contradictions, however. “Without determined counter measures the danger exists — as observed in the case of Greece — of a spiral of rising risk premia and increasing debt, which in turn can be associated with negative effects on growth,†the bank wrote. Either way, with sovereign intervention, the market has managed to pause the constant sell off, which has benefitted one primary asset class. Gold.