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It's not a PIG FLU times, but The outbreak of PIIGS 'FLU' PDF Print

Last year's outbreak of swine influenza (Swine Flu or Pig Flu) could make the world panicked after the discovery of this flu spreading to humans in the United States, Mexico and Canada. These days the world was created panic but not by a PIG but by PIIGS, acknowledge from Portugal, Ireland, Italy, Greece and Spain.

'Flu' in world financial markets once felt in the last few trading days, even when the bailout worth 750 billion euros to the Greek or Greece already in commit by the European Union and the IMF. Giant's commitment to solve the hole in the crisis epicentrum are unlikely to create market players relieved.

Just two days after the bailout was announced, the market players return for their investment after a rescue nets - which include gold. Because of soaring demand for this then this morning - when I wrote this article - the price of gold is above U.S. $ 1.230 / Oz or the U.S. $ has increased more than 34% compared to last year's world gold price. This price broke the previous highest record was in the range U.S. $ 1.226 which is reached in early December last year.

Why if the market does not believe in the efforts - efforts that were hit by the crisis countries to be able to overcome the problem?, There are two very fundamental things that caused this.

First debt is so large that suffered by the countries hit by the crisis, consider the graph of the above facts. Greece and Italy even debts as of late last year it had exceeded its GDP. Our grandmothers used to also know that if this debt problem can not be overcome by new debt, all good assistance from the EU, IMF etc. nothing is free - to be paid on time.

Both are in addition to facing a huge debt problems, these countries also experienced a budget deficit in spending, as well as its economy is not growing - some even declined as experienced Spanish.

Deficit problem is really not easy to overcome because it involves the culture. Government officials in these countries for example can not be easily reduced salary. Public services are also not easily reduced standards (cut the budget).

The results from the EU and the IMF bailout to Greece seems to just sort of medication to relieve pain, but not a cure for the disease. PIIGS 'FLU' (crisis) will probably still continue to recur, not only to Greece and PIIGS but against all countries that have a resistance of 'the body' (economics) the same.

Symptoms or signs of weak economic resilience, among others, yes the three issues above are a lot of debt, budget deficit and lower economic growth or even decrease or not grow.

So the gold price will continue to fluctuate because from time to time people need rescue nets, and gold was the one who proved able to serve as savior nets are easily available, effective in overcoming the problems of inflation and other economic turmoil.
 
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