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"But I don't want to go among mad people," said Alice. "Oh, you can't help that," said the cat. "We're all mad here." (Lewis Carroll)
This week saw volatility become the watchword as Greece seemed to resolve its issues, although not fully, and saw Italy waltz on the stage carrying its trunk full of debt issues. The struggles of the two E.U. countries served to focus attention on ALL the problems in the Eurozone, and inevitably brought the spotlight onto the United States.
This all inevitably drove gold higher, with silver tagging along during the week. The consequences of the sovereign debt crisis in the United States and the European Union, if left unchecked, will at some point become a certainty, a certainty that cannot be overridden.
There is no such thing as a free lunch. At some point the meal must be paid for, the bill must be satisfied. Countries that continue to embrace an operating methodology that deepens their national debt because it is the path of least resistance have now set in motion repercussions that cannot be overridden. We live in a global economy, and unlike depressions of the past, the effects of an economic meltdown in Europe or the US will be felt worldwide.
"But I don't want to go among mad people," said Alice. "Oh, you can't help that," said the cat. "We're all mad here. " Lewis Carroll
Are we all mad here? Look at the facts. But the real question is what it will take to correct this problem. The answer I fear is too simple for the leaders and economists to figure out: spend within your means.
The only solution is to drastically change budgetary policies with one unbreakable rule: revenues must meet or exceed expenses. As countries continue to squander their national wealth they will make a global melt down a certainty. Repeating the actions and mistakes of the past and believing that they will create different results is delusional. One by one the nations of the EU are beginning to fall and top political leaders being forced to resign as the economic cataclysm ripens.
As always, wishing you good trading.
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