The following is an excerpt from a missive that we received from Jim Sinclair this morning, who is the host of a web site called Jim Sinclair's MineSet. He sums up the situation much better than we can so its well worth the time spent on reading what he has to say. The above link will take to his site and his updates via email are free so you have nothing to lose by signing up for them.
Here we go:
A nuclear solution to Europe's debt problems is simply another way of saying "Quantitative Easing to Infinity."
All national debt will be bailed out. All states of the USA will be bailed out.
Paper currencies are headed to dust.
Regardless of the first knee jerk market reaction, gold is going to $1650 and beyond due to nuclear suggestions of adding more debt to entities failing because of debt. This is the EU Helicopter Drop coming up.
Credit default swaps are herein called the "Wolfpack." About that they are totally correct.
Now that they have challenged the "Wolfpack," whatever additional funds might be required will have to be provided or the "Wolfpack" will slaughter the EU.
EU Preps Euro Fund to Fight 'Wolfpack,' Debt Crisis
By James G. Neuger and Meera Louis
May 9 (Bloomberg) -- European Union finance ministers pledged to stop a sovereign-debt crisis from shattering confidence in the euro as they held an emergency summit to hammer out a lending mechanism that may be worth around $645 billion.
Jolted into action by last week's slide in the currency to a 14-month low and soaring bond yields in Portugal and Spain, leaders of the 16 euro nations agreed on the backstop yesterday and told ministers to get it ready before Asian markets open. The European facility may be worth around 500 billion euros, said an official familiar with the talks.
"We are going to defend the euro," Spanish Economy Minister Elena Salgado told reporters as she arrived to chair today's Brussels meeting. "We think we have a duty for more stability for our currency. We will do whatever is necessary."
Europe's failure to contain Greece's fiscal crisis triggered a 4.3 percent drop in the euro last week, the biggest weekly decline since the aftermath of Lehman Brothers Holdings Inc.'s collapse. It prompted the U.S. and Asia to urge broader steps to prevent a debt crisis from pitching the world back into a recession.
President Barack Obama spoke by phone with German Chancellor Angela Merkelfor the second time in three days, adding to the international pressure Europe has faced since a hurriedly arranged conference call of Group of Seven finance chiefs on May 7. Obama today emphasized "the importance of the members of the European Union taking resolute steps to build confidence in the markets," White House spokesman Bill Burton told reporters in Hampton, Virginia.
So, more new words to learn, such as 'Wolfpack' just when we thought they were second world war submarines! These statements to defend the euro remind us of the time the UK decided to defend the pound shortly after it entered the now defunct 'EMU'. The chancellor announced just how much he had in the war chest and Soros and company promptly torpedoed the good ship GB Pound. It looks to us that we are in for a re-run of this episode with euro taking the place of the pound for now.
Got a comment then please add it to this article, all opinions are welcome and very much appreciated by both our readership and the team here.
Over on our sister site, silver-prices.net we have been rather fortunate to close both the $15.00 and the $16.00 options trade on Silver Wheaton Corporation, with both returning a little over 100% profit.
If you would like to get a bit more bang out of your buck, then check out our Options Trading Service please click here.
For the analysis of a recent options trade that we have just closed please click this link.
To stay updated on our market commentary, which gold stocks we are buying and why, please subscribe to The Gold Prices Newsletter, completely FREE of charge. Simply click here and enter your email address.
For those readers who are also interested in the silver bull market that is currently unfolding, you may want to subscribe to our Free Silver Prices Newsletter.
For those readers who are also interested in the nuclear power sector you may want to subscribe to our Free Uranium Stocks Newsletter, just click here.