A few things caught our eye recently:
Viktor Orban (you know, Hungarian PM) has been humming the anti-bank tune recently, saying he’ll put an end to the “era of bankers”. This apparently involves banning forced evictions, and forcing banks to accept discounted repayments of foreign denominated mortgage loans. Sounds like after-the-fact regulation….“He said that while the affected banks had initially condemned the government’s announcement, they were likely to reconsider their position. He added that similar measures were expected to be introduced in several European countries.” Realdeal.hu
Of course, just when you thought it was safe to do some Orban-ranting, the EU comes up with a new Bank Tax proposal. The banks say it will kill the recovery because they’ll have to pass those costs on to the consumer.
For the sake of argument, why do they have to? Shouldn’t the question be whether or not they should?
Gold. Ever get the feeling you should have bought it a couple years ago? It was hitting new highs recently, but the tricky thing (surprise, surprise) is the timing. Basically, to be safe, you’d have to have seen the whole credit crisis coming way ahead of time. In other words, you’d have to have been a serious pessimist willing to watch everyone else make all the money. And it makes a big difference which currency you plan to cash out in as well…SeekingAlpha lays it out. The cycle, it says, is clear:
The basic steps are straightforward:
- Economic/financial crisis leads to asset liquidation and dollar shortage
- Dollar shortage leads to dollar appreciation and gold depreciation (in dollar terms)
- One form of asset liquidation – forced gold selling – leads to gold depreciation (in all currencies)
- Eventual monetary response creates surplus of dollars
- Surplus of dollars causes dollar depreciation and gold appreciation