Dear Tom,

The Authorities, Media and many financial analysts (Bankers) simply DO NOT UNDERSTAND what is happening right now. Hence the confusion of the media.

Q. How will de CDS market affect the Euro?

A. This is not an easy question to answer. It needs some reflection and study work. Important to know is that the bulk of CDS were issued by American financial institutions (correct me if I am wrong) and that they are an "insurance policy”. As the bank (AIG) or the company runs into problems, the bonds which they insured, also run into trouble; their rating (from AAA to B) comes down and this has other implications (Basel norms - see web site).  Important however is to understand that in order to avoid lower Moody ratings (for example), the authorities will bail out ALL financial institutions which are/were issuing CDO's and this means more quantitative easing and monetary inflation.

At this point, I have no clue how much CDO's were issued by EU institutions...

Q. How and when will the ECB start to take these desperate measures like the FED?

Nor the ECB, nor the FED UNDERSTAND what is happening (sorry guys). They are behaving like pilots who got behind the airplane on an IFR (instrument) approach. In other words, they try to correct the symptoms instead of healing the illness. By doing this, they make it all a lot worse.

The ECB and local reserve banks are already taking the some similar desperate measures (see our web site days ago). Only the ECB is a lot more secretive than the transparent USA. The problems the USA has are far WORSE than these of the ECB: the American debt is larger and the Dollar is (still) a reserve currency. Being a reserve currency and held all over the world, at some point it will be dumped as confidence in this over indebted currency disappears. Even worse is that we shall come a point where they refuse to finance the American deficit.  This is why the Fed announced that they would buy $ 300 bn long term debt!!! In other words, they are financing their own debt.

What we are about to see, is a battle for the cheapest currency [remember the Swiss last week!?] as the authorities try to make exports cheaper. This won't solve the problem because there is nothing left to export [remember Made in China!?].

Q. Is it still worth holding the Euro?

Buying Dollars now would really be suicidal. The Euro is just like the Dollar, the Swiss Franc, the Sterling and the Zimdollar nothing but Fiat Paper money. As the battle for survival gets worse, the EU has because of its diversity a handicap versus the USA where one party can decide. Hence short tem (until the ECB starts to intervene on the Forex markets) it is better to hold on the Euro's. But remember that Gold is the ONLY REAL MONEY!

Q. Will Real Estate property further decline in Real Terms?

During a depression, the price of HOCG [high order capital goods] comes down and the price of LOCG [low order consumer goods] goes up. The depression will last until ALL of the misallocated funds are washed out of the system. We had this Real Estate bubble because of misallocated funds and abnormal low interest rates. The Real Estate crisis has just began in the EU. It lags upon the American cycle. Prices will fall until the base where the parabolic rise started (see chart on the site/Real Estate). Only when hyperinflation kicks in, will the price of Real Estate go up again in NOMINAL terms...not in REAL TERMS as long as supply is larger than demand.

Q. Can you recommend any shares in agricultural, solar, wind, nuclear, aqua framing, etc...related topics?

There are several shares listed on the web site. Apart from Gold and silver mines, we think off Oil shares and we have more under Crisis investing II [I believe]. GE (general electric) could be bought for $ 5 and there are many others...

Q. A few days ago my bank recommended buying bonds from solid European companies.

How is it possible people still trust these crooked idiots? Only a year ago they also called FORTIS a fundamentally healthy "Pater de Familia" company. People tend to forget fast....too fast...

The Banks are the origin of the mess we are in! Haven't you read what is published on the site about Bonds? STOP chasing interest rates and seek SECURITY. Bonds are also Fiat Paper money. Once hyperinflation kicks in, interest rates will soar and not only will hyperinflation inflate the value of the bonds away, but the soaring interest rates will crash the market value of the Bonds. This is an absolute LOSS-LOSS situation.

Your question under NOTE: if you don't understand something or an investment instrument, simply DON'T TOUCH or DO it. This ain't a time to trust a Banker, on the contrary. Haven't you had enough lessons?

Goldonomic, Florida, USA - +1 (772)-905-2491