Bankers Abandon All Pretense of Knowledge…..

Our eyes are glued to the Mediterranean area. A crisis arising from this region could test the ECB, and pit Northern Vs Southern economies. The problem for the euro (and the pound sterling) is that if a crunch does occur, which currency would investors rather have?

A- One that has just experienced the first run on a bank in 140 years? B- One that is less than 10 years old which has never been tested in a crisis? C- The currency of the world’s largest economy and most powerful country?

Not an easy question.

However, there is another choice, we believe the only real choice. Gold.

From all the pages and pages of news printed about the northern rock bank run, you may be forgiven for missing two very important admissions from central bankers.

The first came from the Bank of England’s chief economist Charles Bean writing in the banks quarterly bulletin confessing they have not kept up with the financial engineering, and need to look into private money supply:

“The bank will need better understand the credit markets” “said Bean, and John Mc Fall further admits: “ “the bank has not kept pace with technology and private money supply”

Jean- Claude Junker, chair of the banks Euro Group, also gave up pretending all was well when he confessed:

“We have begun to have great concern about the euro exchange rate”. “

At the same time, ECB chair Jean-Claude Trichet decried the French budget deficit of 42 Billion Euros. Virtually calling France a basket case.

~ by sigrarcoinvault on May 2, 2008.