Friday, May 28, 2010

Sprott: Governments Have Run Out of Ammunition, Stocks to Collapse

Eric Sprott says that the recent stock plunge is just the beginning. The upcoming collapse will drive the stock indices below their lows of 2009 in 2011.

According to him, the '$1 trillion' (although it seems only the IMF money is real) European rescue package shows investors are skeptical that these efforts to fix the debt crisis will work.

As usual, Sprott is buying gold (and betting against stocks). Everyone talks their own book, but that is what he is saying.

Governments Have Run Out of Ammunition

Accordign to the story in Business Week, Sprott bets that governments around the world have run out of ammunition in their attempt to boost economic growth and counter banking losses through stimulus spending and lower interest rates

“Our thesis is we’re in for a long, deep cycle, and we’ve thought that since 2000, but up to this point, governments and central banks have always tried to stave it off,”

Since budget deficits are surpassing 10% of GDP in Ireland, Greece, the U.K. and Spain, with the U.S. very close 9.3%, "policy makers have no choice but to pare spending, threatening economic growth".

Stumble Upon Toolbar

No comments:

Financial TV

Blog Archive

// adding Google analytics