After Moody's recent downgrade of Ireland's credit rating and a fresh warning about Portugal's rating being placed "on review" for a possible downgrade, it's clear that the euro zone credit crisis is not over.
For a completely different perspective on Europe's sovereign debt crisis, we invite you to read a free report by Elliott Wave International's European Financial Forecast editor Brian Whitmer, who has been anticipating and tracking the credit contagion across Greece, Ireland, Spain, Portugal and other European nations for months.
Below is a quick excerpt from the free report. For details on how to read it in full now, look below.
Credit Crisis: Stability of Europe is Teetering on the Edge of a Major Collapse
By EWI's European Financial Forecast editor Brian Whitmer (excerpt)
The “Flawed Euro” Concept Takes a Giant Leap Forward
For years, Elliott Wave International stood virtually alone in our belief that the euro’s creation represented merely an optimistic extreme brought on by decades of rising stock prices. It’s nice to see that mainstream bankers, economists and politicians are finally taking notice, too. Strategists at Société Générale recently used the word “inevitable” to describe an eventual euro collapse. Remember that France is a core founding member of the euro, so the definitive proclamation from one of the country’s oldest and largest banks speaks to the extent that euro-skepticism has now penetrated the very core of the continent.
The British, on the other hand, have never shied away from criticizing the European currency, but the recent crisis has turned their usual cynicism into full-blown abhorrence. “The Greece episode has made it painfully clear how flawed the euro project was from the very beginning,” says the director of Open Europe, a UK think-tank. At a recent conference, British Tory party leader, David Cameron, called the European currency a “straitjacket,” promising that Britain will “never join the euro,” if he is elected.
In the United States, former euro cheerleaders have quickly switched sides as well. Six months before the currency’s all-time high, a prominent American economist called the euro “as important a global currency as the dollar.” His latest op-ed, “The Making of a Euromess,” typifies the about-face we’ve seen in recent weeks. “The fundamental problem was hubris,” he now writes, “the arrogant belief that Europe could make a single currency work despite strong reasons to believe that it wasn’t ready.”
For our part, the January 2010 European Financial Forecast identified the start of a major decline in the euro, and the trend continues. Reports of an imminent eurozone breakup are probably still premature, but Cycle wave c down in stocks should continue to benefit currencies that are perceived as safest. Short term, dollar-denominated treasury bills provide the level of safety that we advocate. ...
Read the rest of this important report online now, free! All you need is a free Club EWI password. Other chapters in this free report include:
- A Modern-Day Greek Tragedy Takes Center Stage
- Panic Now and Avoid the Rush
- Hip, Hip, HoorAAAy
- Spotlight Ireland: A Country About Out of Luck