Replies to post #125562 on Zeev's Turnips Patch-No Politics (ZEEV)

[mlsoft]

Zeev...

I do not know how the Euro Union will survive all of this but I tend to think that in some form it will. The "restraints" you refer to are already being ignored to some extent and I expect that to become the norm as the various members (led by the examples of Germany and France) succumb to the realities of their own economic situations - as Tip O'Neill said, "all politics is local." My best guess is that new and much more flexible rules will eventually be implemented and probably monetary policy will be eased as the EU finally comes to grips with the fact that recession and potential deflation, not inflation, is the problem they face. The original rules of fiscal restraint were written during times of great economic prosperity and were wholly unrealistic.

The other big change I expect is that the EU's great social programs will be cut back and labor unions will begin to lose power and influence as the public at large realizes that society can no longer afford such largess. Europe cannot compete with a 3 day workweek, 5 hour days and 3 months vacation with full pay every year (an exaggeration, of course) - it is utterly impossible and there will be social upheaval as those changes are bought about.

mlsoft

[CoalTrain]

No disagreement here, I have been "preaching" the failure of the Euro if monetary and fiscal policy are not working in tandem. Since the EU yielded its monetary reins to a bunch of bureaucrats but each state still determines its own fiscal policy (with external constraints on deficit sizes which is going to cause huge political tension in the Union), I see social chaos ahead.


Don't you think that this will be bullish for gold? I know two bullion dealers in central California that have been in bussiness for more than 25 years. Both coin shops that do a lot of Bullion bussiness. They have three reasons for being Bullish in precious metals.

1)the don't buy the deflation argument. They think inflation will go ape sooner or later, neither think it will happen next week <g>.
2) They say the tape action ( a dealer to dealer system that I do not know much about, not wall street ) and availability of physical gold for their customers is looking stronger than it did in the last run up to $800. Sales doubled after last Christmas. A year and a half ago they said you could not give away the silver 100 oz englehardt bars. The last run up to $4.90 in silver they were having a very hard time getting them for more than a week.
3) They think EU is doomed and when it falls all of Europe will at least temporarily be looking to gold as an economic anchor.

I would not have a clue about number 2 but 1 and 3 I buy and I think how nutz gold goes has a lot to do with how and when Eu falls apart in relation to the other bubbles and troulbles in the world today.

See my post on gypsies and banana's <g>

http://www.investorshub.com/boards/read_msg.asp?message_id=1160294

CT