Can you imagine if European lawmakers went on a five week vacation during a financial crisis, the outcry that would come from our lawmakers in Washington would be deafening. The fact that they left town one day after passing an abysmal deficit reduction package and have made no attempt to return to Washington to pass legislation that would deal with the issues at hand is gross incompetence.
Much discussion today revolves around the the S & P downgrade of U.S. Treasury debt to AA+ and whether that was irresponsible, politically motivated or a face saver in light of their missing the whole financial collapse of 2008-2009.
The truth is this downgrade is one of today's catalysts, but in the big picture, just a comment on the rising levels of Govt. debt and the weak approach taken to cut U.S. deficits. The problems in the U.S. and world economies are a hangover from the over leveraging, over spending, greedy appetite for poor and fraudulent financial products that shook the global financial markets in 2008-2009.
Combined with the financing of two avoidable wars and the unadvised opening of the housing market to unbridled greed, poor regulation and under-funded would be homeowners.
At the core of europe's problems lies the belief that the Euro-zone would thrive as a single entity. Europe needed strong trade cooperation among the European nations, but the combination undertaken to form one entity with a single currency was misguided from the beginning.
August 8,2011
1:00pm
Gold is up 62$ at $1713 an ounce. J.P. Morgan has raised their target price for gold to $2500 going out twelve months, with an average price of $2100 an ounce.
This forecast, whether just jumping on the momentum bandwagon, or foreseeing a recession and chaotic global financial markets begs the question of what is their forecast for the stock market. If they are right about their gold call then the outlook for stocks is very bleak. They won't tell their customers to sell all their stocks, although they see great losses on the horizon!!!
This goes to the heart of what kind of value can be put on advice from the financial firms.
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