Related Articles: The “two-tier” Euro. Class by currency? Euro and Gold? ... and ..The Deutsche Mark is coming, and Germany will still lead the European super-state and .. G20 Secret Debt Solution? Germany Expands Eurozone Rescue Fund ~ March 2010 Germany Considers Central Bank Gold Reserves for European Monetary Fund and .. Will Germany Leave the Euro? It's Looking That Way ... and .. Will Europe become a more unified group of 10 nations. This is where the trend is leading. Keep watching the euro crisis ... and .. Keiser's Full Report: Germany's New Deutschmark & Greece's Drachma Revival? ... October, 2011 ...__November 2, 2011__
Krugman Warns Of “Gigantic Bank Run”, “Emergency Bank Closing” And “New Lira” ...
Gold is higher in most major currencies but especially the US dollar this morning. Although gold has lost some of its early gains in Europe as the euro and equity indices have stabilized.
The shock and uncertainty regarding Prime Minister George Papandreou call for a referendum on a European Union bailout deal continues to reverberate in international markets leading to a renewed safe haven bid. Greece's cabinet decided early on Wednesday to back Papandreou's proposal for a referendum on the EU deal – according to government spokesman. Papandreou is sticking to plans to hold the vote despite signs his government may collapse.
Greek Referendum To Lead to Return of The Drachma?
The possibility of a return to the drachma has raised its head after Papandreou said a referendum on Europe’s rescue package will confirm Greece’s membership of the euro.
There are increasing calls in Greece for a return to the drachma – polls show 33% in favour of a return to the Greek drachma at this time.
Continues ...
The fact that it is impossible for Greece to regain competitiveness while clinging to the euro is becoming increasingly evident. Prominent economists such as Nouriel Roubini, as well as investor George Soros have said as much and influential voices in Greece are now questioning the wisdom of clinging to the euro.
Krugman Warns of “Gigantic Bank Run”, “Emergency Bank Closing” and “New Lira” Paul Krugman’s latest post is extremely bearish and he warns that “things are falling apart in Europe; the center is not holding” Krugman warns that this could lead to a “gigantic bank run” and “emergency bank closing”.
Not only does Krugman warn of a massive bank run and emergency bank holidays but he warns of the euro breaking up and Italy returning to the Italian lira and even warns of similar problems confronting France.
“The question I’m trying to answer right now is how the final act will be played. At this point I’d guess soaring rates on Italian debt leading to a gigantic bank run, both because of solvency fears about Italian banks given a default and because of fear that Italy will end up leaving the euro. This then leads to emergency bank closing, and once that happens, a decision to drop the euro and install the new lira.”
“Next stop, France.”
Uber Keynesian Krugman, has been one of the most vocal gold bears in recent years and his opinion on gold has been biased and uninformed.
It will be interesting to see if his attitude towards gold has changed given the appalling vista he is now warning of.
An important question we have posed for some time – is what price gold in drachma, lira, pesetas, escudos and punts?
What should the ordinary people in European countries do to protect themselves from currency debasement and devaluations?
Unfortunately, we may find out the answer to these questions in the coming months.
read more @ link
