Chen thinks: the European debt crisis far from over

These days, Spain became the eye of the storm of the debt crisis in Europe, its 10-year government bond yields, the first time this year exceeded six percent of the market, bond yields rose to 6 percent, is psychological to shut an important benchmark, breaking the benchmark yield rose to exceed 7%, and will repeat several times in Greece, Portugal and Ireland, efforts in the market to raise cash negative, which was forced to seek financial assistance in the past.

The market expects the Spanish bond yields are likely to rise further, to trigger the panic level of 7 percent, investors worried about the cost of debt will rise to unsustainable heights, unless the European Central Bank to restore to stop buying for two months Spanish bonds. Because every purchase of $ 10 million of Spanish bonds, the cost of insuring its debt against default, has hit as high as the record of $ 520,000, more than doubled in the year before!

Spanish Prime Minister Rajoy warned that the pain to cut $ 10 billion expenditure is absolutely necessary, "We have no money, because the past year we spend too many!"

Rajoy and the United States, Canada, proposed to cut spending, Spain has entered the "throttling" the pace. As for how to "open source", Spain would throw gold reserves to raise cash?

Russia, Turkey and Tajikistan and other countries, in February the collective holdings of gold reserves (Russia over the past five years has been one of the largest gold buyers in global central bank) makes the price of gold compared to the high in February, down more than 8% . In addition, the Central Bank of Mexico and the Czech Republic, in February were also sold 30 million ounces and 20 million ounces of gold reserves. I pointed out that, from a commodity perspective, the reasonable price of gold should be $ 1,200 per ounce. Of course there are many different voices, is one of Canada's largest gold fund manager Charles Oliver.

Back four years ago, April 16, 2008, the day the price of gold is $ 920 an ounce, he made a bold prediction: within four years gold will climb to $ 2,000 an ounce. He also bet that if his prediction is wrong, will be shaved bald in public.

Results can be imagined, of course, a few days ago, long hair Oliver in Canada only a full financial TV channel BNN interview, he admitted that he was too confident, but he is like not throwing in the towel, "he said, September last year, gold prices have jumped more than an ounce, $ 1920 has been very close to $ 2,000. It was only the debt crisis in Europe is moderate, the gold price was declining.

He also said that if the the QE3 launch of gold remained still rising. Obviously, many people hold similar views, are still thought that the gold be able to resist inflationary monetary easing.

No matter how he said, speed connection, specifically a few months ago began to grown a hair, in the end of the program, laughing with shaven heads.

In fact, even now the price of gold dropped to $ 1 500 an ounce, well above the top of the physical gold supply and demand fundamentals, higher than gold reasonable price at least $ 300. In addition, on Bernanke recently a number of speeches, none mention when to launch QE3, and sometimes not even mentioning the QE3, so that the large speculators and funds to sell gold again.

In the price of gold fell, India is often the largest gold buyers. However, I have referred to "With India to improve the gold import tariffs, almost only the Chinese buying gold". This is the data as evidence. In February of this year, mainland China through Hong Kong's gold imports, nearly 13 times the same period last year.

One can not help but make me think of Bernstein mentioned in the book "Golden A Brief History of the 16th century, Spain's golden mountains, the Spaniards confidence in wealth before the expansion, big spending, stifled the enthusiasm for production, making the kingdom full of gold and silver, hand, debt piling up, turns out to be so poor that only gold results indebtedness emerging financial crisis. This shows that gold can not rescue the crisis. At present, the Spanish seem to have to be repeating itself this period of history.

Spain a lesson China should learn a lesson!

Go back to the topic of Europe's debt crisis. The total debt of Spain four times in Greece, the ECB seems reluctant to buy its bonds. To analyze because it stood in the position of the European Central Bank, the greater the sovereign debt holders of the bonds, the private sector more aware of the likelihood of default.

Incidentally, the recent rift of the two oldest in the euro area, Germany and France seems to be getting larger.

In short, the disband of the euro area, the disappearance of the euro, it seems from a premonition a few years ago to produce more and more close to ...