Italy And Spain, Debt On Debt

With Spain, Italy and Ireland in the mix following Greece and Portugal, the ECB is worried. The urgency needed measures are dragging the euro downhill fast. With market bailouts of Greece, Italy, Spain, Ireland and Portugal, there are fears that the numbers of PIIGS are still yet to be accounted. Speculations are circulating with the falling price of the euro, should it get a break with making the Eurozone a federal government to the member states, which would further close the geopolitical gap into one United Europe.

With the deepening European sovereign debt crisis effectively slowing the growth of global economy, the indications point that the EU has not hit the bottom yet. It’s just matter of time. With the sharp decline of the euro carrying over the previous week to reach a high of 1.4109 on Wednesday, it supported a renewed global demand for gold . The world is at odds with defaults, bailouts and more austere packages, supply driven commodities such as gold are benefiting from the global debt crisis in the US, Asian and UK markets.

As another bailout plan lurks for the Eurozone, not having any higher debt load than that of the US, there will be more volatility in the markets. As the single currency held by the European market is slowly disintegrating. This is pushing gold into high demand as investors are favoring the shiny bullion in lieu of other currencies.

The issue, whether EU federalizes or disintegrates is thatthe debt will still be there, and will require a massive devaluation of the euro. On the flip side, if they do federalize, whoever has dominant power in the Federal Government gets to reorganize the economy and society according to their wishes.

To solve the problems of global debt, whether by restructuring, federalizing or disintegrating, currencies will shake the financial markets and will push gold upward. “The debt is not going away. Nobody can pull a rabbit out of the hat. It will take many years for the economy to stabilize,” Says President Ron Fricke of Regal Assets. Debt didn’t happen overnight, and it will not take overnight to be resolved. The core problem began with currency debasement. It is stroking gold as a safe haven with a long running sustenance fundamentally rooted in history.

Source: http://goldcoinblogger.com/italy-and-spain-debt-on-debt/#more-3270