Yearly Bearish in Euro 121.56 – Woe is Europe

IBEUUS-Y.jpg 12-30-2014

The fear of a resurgence of the Euro Crisis has weighed on the common currency driving it down sharply trading at 1.2156 at 6:05 EST. The euro fell to $ 1.2122 intraday, marking the lowest level in two and a half years. However, our Yearly Bearish Reversal is 1.2156 precisely where we are trading at the time of this update. A closing beneath this area will bring all our forecasts into being.

Politicians and economists have NEVER understood what they have done. Southern Europe saw their national debts RISE in real terms with the Euro. Hence, repaying any debt to them was more akin to strip-mining the national wealth. Let’s say you agreed to borrow gold at $300 and it comes time to repay the loan but gold is now $1,200. The debt appreciated rather than declined. The Euro has been one giant bad trade gone seriously wrong for all of Europe. The Greeks have really been hurt deeply by the rise in the Euro.

Now the fears of a Euro Crisis are returning with the upcoming elections in January to be held in Greece. Should the Left Party SYRIZA be the strongest force, this could mean the end for the austerity of the highly indebted euro country. The closer the date for the elections, the more sensitive the euro will become to speculation and uncertainty.

The conservative Prime Minister Antonis Samaras, slated the elections for January 25th after his candidate failed for the presidency. There will be a realistic potential for Greece to leave the Euro and this will open the door to sovereign defaults. A Greek exit will no doubt set off a contagion that will shake the pillars of confidence throughout the Euroland.

Greek-Protest-Natzi

Unfortunately, politicians are trying to retain their power in Brussels for their own self-interest. They are not looking at Europe and any way to reform the structure to save the economy or the livelihoods of the people going forward. What was intended to eliminate war within Europe is fueling the rising tensions within. Having protesters dressing up as Nazis illustrates the rising problems for everyone will blame anyone but themselves in a crisis.