A Plan Germany Could Actually SupportJune 26, 2012 @ 1:05 PM EST
Something Germany Can Support
German Chancellor Angela Merkel has been heard saying “nein” an awful lot lately in response to all of the ideas being kicked around to save the Eurozone. Not surprisingly, Merkel reiterated her opposition to the idea of jointly issued Eurobonds on Tuesday. Her refusal to yield on this issue prompted Italy’s Mario Monti to talk about resigning if Eurobonds are not considered.
However, we should remember that Merkel has made it clear that some form of debt mutualization can be discussed – if, and only if – a deeper fiscal and political integration can be achieved. And apparently there is one plan that Merkel and Germany can support.
One of the schemes that has been under consideration was actually proposed back in November by Germany's own "wise men" and involves a European “redemption fund” that is backed by the gold reserves of the EU countries.
The idea is to create a fund that would take over the debt of all countries that break the EU’s debt-to-GDP limits. In exchange, these countries would have to adhere to strict economic oversight by the “fund.”
Since the fund would be backed by member states' gold reserves, it is estimated that it could be worth €2.3 trillion.
Wondering what our short-term trading strategy is at the present time? Take a Free Trial of the All-NEW Daily Decision (the new “adaptive” system is now more active and more sensitive to trend changes) to find out. Even if you've taken a free trial of the Daily Decision in the past, you owe it to yourself to check out the new system.
To learn more about our NEW “Adaptive” Daily Decision System (a 100% rules-based system designed to guide your market moves) Download our Special Report on the New "Adaptive" Daily Decision System
iShares Germany - Last 12 Month