Six Central Banks to the Rescue: Timing Couldn’t Have Been Better for the Eurozone
Monday, December 5th, 2011
By Michael Lombardi, MBA for Profit Confidential
Now this is what you call perfect timing…
Last Wednesday, on November 30, 2011, six world central banks cut the interest rate at which banks can borrow U.S. dollars. The cost for eurozone banks to borrow immediately dropped and pressure temporarily came off stressed eurozone banks (see Why Michael’s Feeling Vindicated this Morning).
The very next day, Spain and France sell $8.1 billion in government bonds. But hold on, there’s more…
Today,France is trying to sell more bonds. Wednesday, it’s a Portugal bond auction. Next Monday, it’s Italy’s turn to sell bonds, and, from that date on, from December 12 to December 29, either Italy, France, Spain, Greece, or Portugal will be selling government T-bills or bonds every single business day…a total of 13 government T-bill/bond auctions for the eurozone.
Talk about perfect timing! If the Fed and the five other major central banks didn’t announce on November 30 that they were effectively boosting the money supply, how many more billions in interest would the troubled eurozone countries have had to pay on their bonds?
If you don’t believe in coincidences, the question is: what’s really going on here?
Central banks see the debt crisis in the eurozone deepening and are insuring that the system is flush with cash, so the entire system doesn’t freeze like it did during 2008. Yes, this is an action to stop credit from seizing up in the eurozone and spreading to America, but it’s just more “kicking the can down the road.” The structural problems of extreme government spending and debt, zero economic growth, and high unemployment are not being addressed, just kicked down the road some more.
Next Post: Looking Ahead to 2012—It’s Dividend Paying Stocks or Zero ReturnsPrevious Post: Mainstream Investors Start Foray into Gold
Tags: debt crisis, European banks, eurozone, global recession
Tweet
Sign Up for PROFIT CONFIDENTIAL and
receive a FREE copy of our exclusive report:
"A GOLDEN OPPORTUNITY FOR STOCK MARKET INVESTORS"
We respect your privacy and
will never share your e-mail address.
Michael bought his first stock when he was 17 years old. He quickly saw $2,000 of savings from summer jobs turn into $1,000. Determined not to lose money again on a stock, Michael started researching the market intensely, reading every book he could find on the topic and taking every course he could afford. It didn’t take long for Michael to start making money with stocks, and that led Michael to launch a newsletter on the stock market. Today, Michael only employs the top market analysts and editors. Some of our recommendations have posted gains in excess of 500%! Michael has authored and published over one thousand articles on investment and money management. Along the way to building Lombardi Publishing Corporation, now with over one million customers in 141 countries, Michael became an active investor in real estate, art, precious metals and various businesses. Readers of the daily Profit Confidential e-letter are offered the benefit of the expertise Michael has gained in these sectors. Michael believes in successful stock picking as an important wealth accumulation tool. Married with two children, Michael received his Chartered Financial Planner designation from the Financial Planners Standards Council of Canada and his MBA from the Graduate Business School, Heriot-Watt University, Edinburgh, Scotland.Follow Michael and the latest from Profit Confidential on Twitter
