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2011年12月7日 星期三

(8) Disintegration of the euro, there is the fact that sooner or later, you should prepare as soon as possible, the policy response to large storm?



This blog was written in 07/12/2011

The ING Group published a report last week, referring to the collapse of the euro area, once the region's first two years of gross domestic product (GDP) will decline significantly 12%.


The current poor financial market conditions, when compared to the Lehman Brothers bankruptcy, the Financial markets hurt more.


The report noted that the first year of the U.S. economy will decline by 9%.
The dollar will rise to 0.85 Euros, and oil prices will crash to $ 55 per barrel.


On the contrary, the edge of the Euro area countries, including Spain will reach double-digit inflation.


"Wall Street Journal" reported that international speculators George Soros said that Global financial system is now in the brink of collapse.




Soros has warned at a public occasion, the current world financial system is in“Self-Reinforcing

Process of Disintegration.” Quite possible disastrous consequences, each country should try to

prevent this trend. Soros now believes that the differences between emerging markets and

developed countries have become increasingly evident, and his contribution to developing

countries holds more confidence.


Warren Edward Buffett and Alan Greenspan, they all agreed that the final result the Euro will

be forced disintegration.


You should advance to prepare for the upcoming impact.



A month ago, although the debt crisis in Europe has been heating up, the market still has a lot of

people think that European debt crisis with the European Union mediation efforts of the

leadership, and to obtain relief.



Now, on the table, the best option, raised by Germany; Germany and the European Central

Bank believes that to resolve the debt crisis in Europe must proceed from the fundamental.



German leaders believe that all member states must adopt, consistent with Germany's public

finance policy. As long as the European League countries agreed to amend the EU treaties.


In other words, the EU Member States, must submit the annual budget review by the

European Union,




Or, more bluntly, the Member States of the budget, first to Germany, to approve, when

member States are fall into economic difficulties, in order to be financially, the European Union

and the European Central Bank's support.When Member States of the expenditure, revenue to

redress the balance, the debt crisis can be resolved.




However, to modify the EU treaty is a waste of time-consuming on the project.Even the leaders

of the Member States agreed, but the members of Congress, is willing to hand over financial

dominance, it will be difficult to overcome a series of checkpoints.The current situation has been

reached, cannot allow the debt crisis, delayed more than one more year, so that the

disintegration of the entire Euro zone, has become an irreversible fact.



Eurozone politicians propose another method to solve the debt in Europe is to launch a

European version of quantitative easing measures. Start the machine to print money, the result

of large supply of currency, the country's outstanding debt will continue to increase, and the

currency will continue to depreciate.




Quantitative easing measures, if to put the words, living in Europe and the people who hold

cash, member States of the people, afraid of leaving the Euro zone countries, in order to avoid

the hands of the currency devaluation, cash will be exported to Europe; the European banking

system's money will be less and less.


With the euro's purchasing power fell, those who rely on the government to pay living expenses

of the Europeans, how to live?


In France, the old retired elderly, living expenses, 85% of the expenditures are funded from the




Depreciation of the euro, when retired life is hard, they will pressure the government to require

assistance, the government in order to maintain political stability, was forced to bail them out.




So, the implementation of austerity, savings to the money, politicians under pressure, and

ultimately distributed to the people again, but the country's total liabilities, with the high

interest rates, rising up, debt-ridden countries to achieve the balance of payments balance? It is

really a fairy tale. Who can solve these problems again and again?



In my view, to solve the debt crisis in Europe, finally, is the most likely way is: the European

Central Bank to implement the European version of quantitative easing, the euro depreciated.


However, to rely on depreciation to reduce the debt burden, the scale must be grand, at least to

make the Euro depreciated by more than half of the loss of purchasing power.




Europe, many people have to rely on government support for living costs, currency devaluation,

will certainly lead to inflation, people living in a difficult, but will the reality of life is hard,

turned into a political pressure, increasing pressure, the government will have to increase

spending and, eventually, back to the debt crisis of the starting point.



Debt crisis, currency devaluation, debt accumulated, so the debt crisis took place again, then the

currency devaluation, debt will be piled up,???


Given the current adverse situation, the euro zone if it disintegrated, the global financial

markets, certainly set off a tidal wave.


If you are a financial market investors, regardless of your hand holding the investment

products, is what kind of category, must take precautions.


Of course, there is a crisis, will also provide the opportunity to make big money.


If you can equip up early, you not only win the game, and perhaps, also crowd into millionaires





The current crises, like wrapped in paper with fire.

National politicians, with a beautiful pattern paper, the burning fire, with layers of

encapsulation,paper wrapped in fire, a temporary lack of oxygen combustion, and the fire was

still being controlled.However, when rating companies punctured paper ball, the oxygen began

infiltrated the paper balls, paper balls wrapped in fire, was immediately burnt to ashes.


This wave of financial crisis, will be very rapid, even surprising.


"Serious damage" and "Not only with money and celebrity"


"Broken up" and "make a lot of money" between each other on the exchange, a quick fix.

Next Issue:
(Chapter 9)Savvy investors, is to be familiar with the principle of the Golden Ratio?


(Chapter10)The use of Golden Ratio set to enter the market price, out of the market's bottom line. Do you have mastered this technique?