Gold reclaims currency status as global system unravels by Ambose Evans-Pritchard

By Ambrose Evans-Pritchard
The Telegraph, London
Sunday, June 20, 2010

http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/7841961/Gold-reclaims-its-currency-status-as-the-global-system-unravels.html
We already know that the eurozone money markets seized up violently in early May as incipient bank runs spread from Greece to Portugal and Spain, threatening the first big sovereign default of our era. Jean-ClaudeTrichet, the president of the European Central Bank (ECB), talked days later of "the most difficult situation since the Second World War, and perhaps the First."

The ECB's latest monthly bulletin gives us some startling details. It reveals that the bank's "systemic risk indicator" surged suddenly to an all-time high on May 7 as measured by EURIBOR derivatives and stress in the EONIA swaps market, exceeding the strains at the height of the Lehman Brothers crisis in September 2008. "The probability of a simultaneous default of two or more euro-area large and complex banking groups rose sharply," it said.

King World News Blog Update "You will have no protection from reckless politicians except through the ownership of gold." - Eric King

Germany’s “Deflation Policies” Angers Italy
June 17, 2010

Southern Europe appears angry over being forced to act in a fiscally responsible manner. It also appears they are going to use the threat of leaving the EU as a negotiating tool: A group of 100 Italian economists has written an open letter warning that the EU austerity policies being imposed on Southern Europe may tip the region into a downward spiral, risking the disintegration of the monetary union.
June 17, 2010

From the Ambrose Evans Pritchard article:

The `politics of sacrifice' in Italy and in Europe run the risk of accentuating the crisis in the end, causing a faster rise in unemployment and company failures, and could at a certain point compel some countries to leave monetary union. We must have an immediate debate on the extremely grave errors in economic policies now being committed," the economists said.

The letter, which has echoes of a famous letter to The Times by 360 economists denouncing the Thatcher cuts in the early 1980s, was drafted by a network of Left-leaning Keynesian economists and published by Il Sole.

The letter accused the EU authorities and leading governments of being out of step with modern economic thinking, marking the first clear revolt by parts of the eurozone's intellectual elite against EMU orthodoxies and especially against the "deflationary economic policies" being imposed by Germany.

The group said states might choose to leave EMU in order to end job destruction.

"Some countries will be pushed out of the eurozone, others will break away to free themselves from a deflationary spiral."

These countries do not want fiscal responsibility or accountability. They want to print money and they are ticked off they can’t do that because they have the Euro as their currency.

You will have no protection from reckless politicians except through the ownership of gold. Do not worry about fluctuations in price. These same politicians will guarantee a mania in gold, it is your insurance, and remember never own paper gold.

Eric King

KingWorldNews.com

To read the entire Ambrose Evans Pritchard piece CLICK HERE.