On Growing Tensions, Spreading Global Downturn And A Dead-End Greek Resolution
by Tyler Durden
ZeroHedge.com
05/22/2012
Just when one thought it was safe to come out of hiding from under the school desk after the latest nuclear bomb drill (because Europe once again plans on recycling the Euro bond gambit – just like it did in 2011 – so all shall be well), here comes David Rosenberg carrying the launch codes, and setting off the mushroom cloud.
From Gluskin Sheff
Growing Tensions
Anti-austerity demonstrations in Frankurt. Massive emigration out of Spain. Student bombings in Italy. Suicides in Greece, along with a run on the banks. Camp David discord with Germany. Unusual nuclear war talk out of Russia.
The euro area fiscal and banking crisis is taking on a certain destabilizing geopolitical tone. One reason why gold — as a hedge against instability — is starting to stage a comeback. After touching a four-month low last week and moving into official correction mode of a 20% decline from the highs, the yellow metal then went off and enjoyed its best day since January on Thursday and posted a nice follow-through to finish off the week.
Spreading Global Downturn
Italy, Spain, Portugal, Greece, the Netherlands and Brazil are now facing economic contraction (Brazil is the world’s seventh largest economy and despite a huge 350 basis point rate cut from the central bank, the country has suffered three straight months of declining economic activity). France is stagnating. China is slowing down rapidly. The only two countries I see that have managed to surprise to the upside are Germany and Japan (the latter just saw the government actually raise its assessment of the economy).
The Rest…HERE
