All the markets around the world are linked to one another. From America to Europe, Asia and to the Arab world, the happenings in the economic markets are so mind boggling, that even with attempted corrections, their consequences seem irretrievable.
When one in every 111 American home are being foreclosed throughout the US, it shows the government is not the only the culprit adding to the problem, but banks. Yet banks are pretty much run by the government, so the blame goes right back into the leaders controlling the banks. If something goes wrong well the government will be there to save them. In the case of the US, it’s the big banks running the country with the Fed at its helm.
Eurozone banks are no different, except that they have large securities as protection for their governments. But lately, as fear seized the EU nations with securities falling, banks have gone into a fear mode as their capitol worsened. With countries on the edge of default, securities falling, so do their capitol. People in Greece are flocking to banks removing their money and putting them into safe deposit boxes. This has created more panic among the Helenian. Waiting and hoping for the IMF to pull Spain, Italy, Belgium, Ireland and Portugal from the edge of death, banks are refusing credit in lieu of being financially strapped themselves. Thus, the De facto in the US.
The Swiss are also controlling their currency, but for an entirely different reason. The Swiss franc is the only currency next to the Yuan going gang-busters. The people who are buying the currency for safety are also depleting the Swiss banks. With the carnage spreading in Europe, the Swiss franc monopoly is feasible, but the restorative, rebalancing of Europe and with markets tightening demands, a bubble for the currency is imminent. This will add a change of heart for those investors who will switch from Swiss franc to Gold .
Watching the 65 year of peace in Europe threatened by pummeling stocks and mushrooming into a never ending debt tide with all sorts of market pullbacks, it may lead Germany to leave the Euro. It can’t bail out Italy, Eurozone’s third largest economy on a verge of begging private sectors for money. If it cannot borrow from private sectors, it could be more than Germany or the rest of Europe can handle. It’s either that, or a fiscal union which will end in tears and threaten Europe…
As the increasing concern clouds over the global economy, investors worry when the next shoe will drop in the Eurozone and crash the market. With pending recessions facing both US and Europe, investors are fleeing under the protection of Gold . The turbulent world economic chaos is not going away. Gold has pulled back in July to $1,487, but with the US credit fiasco and severe fiscal facing Europe, gold leaped its way up to $1,675 an ounce in early trading during the wee hours of last night.
A slight dip may bring investors looking to buy but haven’t yet. Central banks around the world are buying Gold like never before! “Given the current global situation and fear trade, its doubtful gold will correct, says Regal Asset Team of Analyst adding, “when governments intervene in currency markets it’s a safe bet that the instability of paper money will make gold shine as a form of money even more.”