Turk – Expect Tremendous Chaos, Europe Deteriorating Rapidly
May 15, 2012
With major markets around the world continuing to get hit, today King World News interviewed James Turk out of Europe. Turk told KWN the situation in Europe is deteriorating and the banking system is being severely tested. Turk also discussed gold and silver, but first, here is what Turk had to say about the crisis in Europe: “The situation here in Europe is rapidly deteriorating, Eric. Moody’s downgrade of 26 Italian banks was just the latest nail in the coffin. It seems likely that more bank downgrades are coming in other countries because Europe is in a downward spiral.”
James Turk continues:
“Bankers are running scared because so many banks are on the verge of insolvency or have already reached that state. So they are not lending. They are still way over-leveraged and trying to work off all the bad loans they still have on their books.
Because it is difficult for companies to finance their operations, economic activity, pretty much everywhere throughout the EU, continues to contract. This in turn is causing more bad loans at the banks and yet more contraction of bank loans to businesses.
This downward spiral has all the outer appearances of being a deflationary collapse, except that inflation in the EU is rising, not falling. This presents an interesting conundrum. I think the answer is twofold. Clearly, ECB money printing is inflationary….