Another day, and yet another rise in Spanish bond yields. Madrid’s sovereign debt all the way down to two-year maturity is now trading above 7% – the first time this has happened to two-year borrowing rates since 1996. Italian yields are not far behind. The Spanish government denies that its about to request a €300 billion bailout from Brussels, while 17 leading economists claim that Europe “is sleepwalking towards disaster”.
News that the UK economy contracted by 0.7% during the second quarter – a much worse fall than the 0.2% contraction economists had expected – has added to the gloom. This is the biggest quarterly drop in British GDP since Q1 of 2009, and confirms that the country’s current “double-dip recession” (what in more honest times used to be called a depression) is the longest in 50 years.
Amid the euro gloom the dollar had another strong session yesterday, with the Dollar Index back above 84.00 for the first time in two years. This continues to create headwinds for precious metals (and silver in particular), though poor man’s gold is still being supported on forays below $27. Gold and silver have by and large been confined to a pretty right price range since late May, so any breakout – upside or downside – will have important short-term implications for these markets.
Readers may enjoy the following Casey Research interview with Reagan administration Budget Director David Stockman. The subject? The global debt super-cycle, and America’s coming date with fiscal reality. Fascinating stuff.
Below You May Find The Video.
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The Depression Drags On For Britain
Published 07/25/2012, 07:13 AM
Updated 05/14/2017, 06:45 AM
The Depression Drags On For Britain
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