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The Euro Crisis Rolls On...

The Daily Reckoning U.S. Edition

The Daily Reckoning | Saturday, November 5, 2011 Boots-on-ground news from the land of euro-living... A few thoughts from some of your fellow reckoners... And, as always, the week’s best reckonings, neatly archived for your weekend enjoyment... ------------------------------------------------------- What do you think of this beauty? It’s the first 24-karat (99.9% pure) gold coin by the US MINT, and we have 99 to give away FREE to our best readers...first come, first served. Ain’t she a beauty? If you’d like to get your hands on one FREE, simply click below to learn more... Click here right now to find how to claim yours. The Euro Crisis Rolls On... Joel Bowman Checking in from Buenos Aires, Argentina... The on-again, off-again Euro crisis roiled markets again this week, as news of Greece’s equally on-again, off-again referendum hit newswires across the globe. But as all Europe’s horses and all Europe’s men try to put their moribund economy together again, confidence is beginning to erode. At least it feels that way to us...not that we had any confidence in the harebrained scheme to begin with. Nevertheless, each post- meeting, short-term rally seems to us a little more tepid than the last...and a little more “short term-ish.” Could it be that voters are finally beginning to grow tired of listening to their political masters’ quick-fix promises? It’s hard to tell from the official announcements and press releases...so what do the euro folk themselves have to say about it all? By now you’ve probably seen one or both of our “Farewell Euro Tour” clips...the clips that shot our editorial director, Eric Fry, to minor, quasi-stardom on YouTube. [In case you missed them, you can still see Part I and Part II here.] Yesterday, Eric released the third and final installment of his “man on the boulevard” series. But before getting into it, he kindly provided a few notes on how the Europeans themselves (the voters, that is...not the poliwonks) appear to be handling the unfolding crisis. “Generally speaking,” Eric observed, “support for ‘saving Greece’ was lukewarm. That said; the ‘bailout-receiving’ folks of Southern Europe were noticeably more enthusiastic about saving Greece than the ‘bailout-financing’ folks of Northern Europe. “The Dutch, for example, expressed some exasperation with the process and felt that they had already contributed more than enough of their taxpayer euros to the Greeks and to the other PIIGS nations. Furthermore, the Dutch also expressed a strong preference for their old national currency: the guilder. The Germans and French voiced a similar sentiment. “Notwithstanding the simmering discontent of many Northern Europeans,” continued Eric, “the public voice of Europe remains unified in support of the Greek/euro rescue. As the G-20 nations conclude their meeting in Cannes, France, a bevy of European leaders are reiterating their support of the ‘rescue plan.’ “But one thing is clear, the larger the cost of the rescue plan grows — and the longer no visible benefits materialize — the faster public discontent will grow. To repeat, based on our interviews, popular support for rescuing Greece is already very shaky...and it appears to be growing shakier by the day. “As we observed a few weeks ago (immediately after concluding our man-on-the-street interviews in Europe), ‘The EU’s bailout schemes seemed to have captured the minds of Europe (like a hostage), but very few hearts. Resignation is the dominant emotion, not resolve. “So please pull up a chair and enjoy the third and final installment of the ‘Farewell Euro Tour.’” Just How Rich Could You Get When the Innovation Curve Goes Vertical? Amazing breakthroughs. World-altering research. A select batch of important new ideas could make you very rich — very quickly. Getting ready for the innovation curve to go vertical is easier than ever. Click here to find out why. ALSO THIS WEEK in The Daily Reckoning... Dinosaurs, Dodos and AAA Governments By Addison Wiggin Baltimore, Maryland The history of sovereign finance is a history of broken promises. Governments are very good at stiffing their creditors. During the boom phase of a lending cycle, creditors tend to forget this inconvenient truth. They forget that government borrowers are nothing like corporate borrowers. They forget that government revenues derive from confiscation, rather than production. As a result, during the boom phase, creditors demand much lower interest rates from government borrowers than they do from similarly rated corporate borrowers. Anarchy — An Investor’s Best Friend By Eric Fry Laguna Beach, California A revolution is underway — one that will topple the existing order. It’s not the sort of revolution that decapitates monarchs or murders czars. But a revolution is underway, and it is the kind that’s going to overthrow faith in government. But that’s not necessarily a bad thing. In fact, it might be a very helpful thing. I think it is time now to begin investing as if there were no government guarantees...or at least no reliable government guarantees. Mining for Gold on Wall Street By Addison Wiggin Baltimore, Maryland Many technical analysts are saying the gold and silver markets are “breaking down.” I say the precious metals markets are cracking up...with laughter at the monetary shenanigans going on in the US, Europe and elsewhere. Sure, gold and silver have suffered a sharp correction over the last few weeks. But so what; corrections always occur during long-term bull markets. Gold and silver are still cheap, which means that long-term investors cannot afford to ignore the recent weakness in the precious metals markets. Winning Ideas in a Losing Market By Chris Mayer Gaithersburg, Maryland We both reached for the check. “No, no, I invited you,” I said. “I’ll pay.” But then my guest made an offer I couldn’t refuse. “Come on, we’re in markets. Let’s flip for it.” Well, how could I resist that? Everyone in markets — from careful investor to highflying speculator — learns to live with chance, and even to relish it. It’s part of the thrill of markets (and life); you just never know how things might play out. So we flipped. I called heads. Heads it was. And Frank Holmes paid for dinner. Urgent Message From Addison Wiggin I had no clue what Addison was doing in the office SO early Friday morning. Especially with a camera crew. You see, Addison doesn’t often appear on camera. I knew something big must have been cooking. And now that I’ve just seen the footage, I finally get the reason for his urgent message. Check out this rare video warning that he’s recorded for you... right here... The Weekly Endnote... And now, it’s over to a few readers for some thoughts, ideas and rumors... First up, this one from Reckoner Steve F... Don’t count the Greeks out. they managed a 50% write-off and are holding out for 100%. They may be the only ones to get it right. Wipe the slate clean and start over. Do you think they really care about the other guys in the room? Bonds and presses, it just seems that the entire world and the Fed is giving me the “heads up” to build a short position in bonds that, with enough guts, in the next 2 to 5 years I could be wealthy. And this, from Reckoner Brenton M... It’s far worse than Addison said. If government guarantees are bleep, can the money be anything but bleep? The money all over the world is nothing but bumfodder and magnetism. If the guarantees turn to bleep, how long before people wake up and smell the bleep in their wallets and purses? People have got to make sure that money doesn’t stink. The yellow and the white. With the magic metal, one can smile on all his foes. And finally this one, from Reckoner Ken L... I wanted to comment on Bill Bonner’s Column. I always enjoy what he has to say. In this column when he references the “retirement of debt” he explains that people are reducing their spending to pay down debt. I believe the reality is that the 14 trillion in credit card debt is how much people have been living beyond their means. People are now spending only what they have, which is a healthier way of living. It seems that everyone’s perception of how we as Americans should live was exhibited in 2006-2007. You have heard about the roaring ’20s which was followed by the depression. So here we are again. Please keep the articles coming. --- As always, we welcome your thoughts. Email them to the address below and... ..enjoy your weekend. Cheers, Joel Bowman Managing Editor The Daily Reckoning