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Message: THOUGHTS on EUROPE right now....
Our Thoughts on Europe Right Now
"We humans are instinctively herd animals, and we tend to panic when we see others around us panicking. We lose our independent judgment and we freeze in fear at exactly the moment we should be buying aggressively."
Sir John Templeton
Right now the masses are preparing for a "Lehman Brothers Moment," which is exactly why we don't see this happening in the near term. Could we have a scare, sure but a full blown meltdown is not going to happen with the masses in a panic and selling pressure hitting the entire market as we are seeing today.
It is more likely that the summit in the EU this weekend 'punts the can,' rather than find a solution to their debt crisis. Here is the latest from the British Prime Minister heading into the summit.
"What we need is a decisive plan for Greece, and we need decisive plans to help the European economies moving. But if we're not going to keep coming back and back to meetings like this, we also need to deal with some of the longer-term issues at the heart of running a successful single currency, having a bank that gets behind that single currency, having coherent long-term plans to make sure that single currency is coherent. We have to address those issues too, or those crisis will keep re-occuring."
Our interpretation of the quote above - let's give more power to the central bank so that they can print us out of our debt crisis.
Where does Ben Bernanke likely stand in all of this?
In Bernanke's writings and speeches always says that in previous downturns, central planners never did enough. It is likely that Bernanke is going to announce quantitative easing (QE) very soon, our prediction so far has been 100%, pre-QE he needed gold, silver, and oil to fall, now that they have, QE in our opinion is locked and loaded.
The announcement of more printing in Europe and the U.S. will turn this market around immediately as the world becomes flooded in fiat currency.
Bernanke knows that if the U.S. goes into another 2008 panic, it may not be possible to bring it back, so though Bernanke wants to see a scare, the printing presses are probably getting revved up as we speak.
In our last interview with James Rickards, author of Currency Wars, he noted that QE3 had to be in May or June because if he waited until the fall, it would look political. If he waited until after the election, it will be too late!
Our suggestion is to overcome the herd mentality, those that buy this dip could be greatly rewarded if they buy the right companies.
Already we are seeing some of the major mining stocks bounce today even though the over all markets are down.
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