EU Private Sector Faltering

The recent announcements by a number of corporations participating in the EU concerning slashing tens of thousands of jobs, underscores the reality that the private sector continues to struggle, even as governments had hoped they would help turn the region around.

Among those recently announcing jobs being slashed are UBS (UBS), which said it'll be be getting rid of a massive 10,000 jobs - which has already begun. Other major employers cutting thousands of jobs (aggregately) are ING (ING), Kloeckner, Ericsson (ERIC) and Bombardier.

A growing number of economists believe the next couple of years in Europe will see jobless rates jump to even worse levels than they stand at now. We probably won't know until around the summer months because these current layoffs won't affect data until about six to nine months after the layoffs are implemented.

The major problem in Europe is that governments have finally started to shrink a little, causing bloated staffs to be laid off, but at a rate that the private sector can't keep up with.

Of course it was never a reality that outrageous government debt and spending could be compensated for by the private sector after years of abuse, fraud, and unsustainable promises and practices.

People in some countries don't even think in terms of the private sector as a legitimate work environment because they've been brainwashed into believing government is the great healer of nations. Most are finding out too late that that is a fallacy, and since the private sectors of nations were weakened by these outlooks and effects, it's impossible in a short period of time to rectify all the mistakes that have been made, even if they wanted to.

It has taken far too long for governments in the EU to shrink, and they're no paying for that ongoing irresponsible mindset, as austerity is forced upon the nations of Europe, with a private sector not robust enough to absorb the people being released from work.

The good news is over time this will be positive for the private sector as workers and the rest of the people realize that governments can't provide for them in the ways that were promised. It's productivity that results in prosperity, not artificially created government jobs that provide ridiculous benefits the productive are asked to shoulder. Those days are thankfully coming to an end, as are outrageous union demands.

Because Europe has played far too long with countries that long ago should have decreased the size of government, now the forced austerity is pressuring private companies who must operate under actual market conditions, and not the illusory markets created by governments throwing debt-induced money around while being enabled by central banks and failing Keynesian policies.

Yet some foolish economists continue to say things like there must be growth in the "public" or private sector if some of the nations in the EU are to stay in it. What about limited government and downsizing don't these quacks understand? It's inevitable. These governments and their debt coming from endless spending and programs are through. In a relatively short period of time what they were before the sovereign debt crisis will no longer exist.

There will be governments still in place of course, but the bloated monstrosities they have become will gradually be shrunk down in size to the benefit of everyone but the parasites that used them to their advantage.

In the months ahead we'll see growing pressure in Greece, and probably Spain and others in the eurozone to start thinking in terms of abandoning the euro for their own currencies. That would result in some short-term pain, but over the long haul it would be the best for all countries in the region, as well as the rest of the world.

But if nations continuing to use their central banks as a rich uncle not willing to rein in a spoiled kid's spending don't change, this will extend across the globe, as the United States is hanging on by a thread, and with over $220 trillion in unfunded liabilities facing the nation, and China having taken up some bad Keynesian money creation habits, it may be only time before pressure rises on all of them.

Greece Poised to Vote on Austerity Measure

Even though the coalition government of Greece can't reach a consensus on required austerity measures from international lenders, putting off the vote for another week, there is no doubt a vote will soon come, as it is expected that some time next week draft legislation will be submitted for a vote.

Finance Minister Yannis Stournaras addressed reporters saying "All of the (draft legislation) will be submitted next week. I think there is no other way to do it."

The main battle among the coalition is between the conservative majority and the leftist representatives.

Greece won't receive any more loans unless an austerity package is passed by its parliament.

The much needed labor reforms associated with the austerity measures are being opposed by the leftist, who say they will vote against the package if they aren't thrown out.

Greece Prime Minister Antonis Samaras said this concerning the chaos he sees as following in there is no agreement in place, "The problem is not whether we (introduce) this measure or that measure. On the contrary: It is what we would do if no agreement is reached and the country is led into chaos."

As usual, the selfish Greek unions are lining up to protest the implementation of another set of austerity measures, being unwilling to make concessions that will be economically forced upon them whether they like it or not.

I'm not primarily talking about politically here, but the market itself will force the moves, as the economic practices of Greece, along with other socialist-influenced countries are unsustainable, and a more robust capitalist system (not crony capitalism) must be released through the governments and unions getting out of way and allowing economic liberty to come forward.

It is likely this is the last chance for Greece, no matter which way the vote goes, which will surely be to submit to the austerity measures required by the international lending community.

More importantly, Greece hasn't been forthright with its promises in the past, and even if they get aid this time around, it would be surprising if it ever happens again if they renege on it and continue on with their reckless spending and lifestyles at the expense of Germany, and to a lesser extent, other euro zone members.

Leftist and socialist political parties in Greece continue to act as if they can do what they want and still have access to international funds. Worse, they are still in denial of the fact the promises they have made and the concessions one have never been sustainable, and now the inherent weakness and failure of all socialist economic ideology and policies are again being revealed as unworkable. That's what this is really all about, and nothing can change the realities, no matter what is asserted or fought over.

The money has run out, and the lifestyles lived by Greeks and others looking to the government as their healer and provider, are finding out to their dismay that socialism and Keynesianism doesn't and can't work over the long term.

That is the reality facing all of Europe and America as well. And the sooner it is dealt with, the quicker the pain will pass and economic health will be the result. But since no one is really addressing the issue, even with a nod towards some austerity (it's a deeply ingrained mindset that is the real problem), in the end, until people change their attitudes towards being "owed" something by government and the productive people in the nations of the world, nothing will change.

Austerity will be voted in by the government of Greece. It's a major question as to whether this time around the austerity measures will be adhered to. Either way, this is just a temporary respite, and inevitably Greece will go bankrupt, with other countries following in its footsteps.

Just like the failed USSR, which capitulated to the inability to implement communism and socialism, all other efforts to do so are also doomed to failure.

It doesn't work, and neither does crony capitalism or fascist government agreements and going to bed with businesses.

The free market is the only answer, and while it'll take decades to do so, it will emerge out of the ashes of government interference, fascism, socialism, and any other attempt to deal with economics and people.

Only people taking voluntary actions to interact with the businesses and people they choose to will cause an economy to survive and thrive - whether local, regional or national - and there will be no answer until that becomes the practice of people around the world.

The other major factor is the abandonment of government as the looked-for entity which is to heal and provide for people, which has led to debt that is impossible to pay off. The U.S. alone has unfunded liabilities of over $220 trillion. Yes the trillion is the correct figure. There is no way that will ever be paid off. A default is coming for the American government, and it's only a matter of what type of default, not if there will be a default.

There is no doubt a number of commodities will benefit from the ongoing debasement of currencies in major economic countries, and over time gold and silver will continue to rise in price, as investors realize the U.S. dollar and most other currencies are extraordinarily flawed.

Some gold and silver miners are set to soar, as are the price of silver and gold, which many will make a lot of money off of in the futures' market, with silver looked upon by many as being the probable best investment over the next decade.

In the end, there continues to be no real political will to tackle the spending and debt problem coming from out of control government, and until the economic conditions force governments to shrink and be much more limited and contracted to what their real purpose is, everything will continue to get worse.

Investors need to be aware of that, and make decisions accordingly.

Greece Won't be Repaying Debt

For those who really understand what's happening in the euro zone, it isn't surprising in light of the visit by German Chancellor Angela Merkel to Greece, that it highlights the fact that Greece won't be repaying its debt anytime soon, which according to the IMF, will climb to an astounding 171 percent of gross domestic product (GDP) in 2012 and 182 percent in 2013. 

The IMF adds that Greece won't be able to pay the five-year debt reduction target that was the foundation behind receiving the $130 billion euro bailout. The original goal of cutting the debt level of the country to 120 percent of GDP by 2020 is now considered an impossibility by the IMF. It says the existing debt will now need to be restructured. Some economists saw this coming even before the bailout was put into effect, and many in Greece continue to demand that the austerity measures required to receive the money be, for the most part, rescinded.

 Talking to CNBC, former deputy minister of economy and finance, Peter Doukas, said, "The Greek debt is not repayable at this point. The economy is too weak to afford a 300 billion euro ($387.9 billion) plus debt." "Perhaps now isn't the best time to talk about it, but very soon we're going to have to talk about rescheduling of Greece's official debt. It simply isn't repayable," Doukas added.

 Doukas concluded, "There's going to be an official debt haircut or restructuring or rescheduling of sorts. My feeling is that it needs to go 15 years further in terms of maturity and a cutting of interest rates by at least 1.5 percent." Personal incomes have plunged by 25 percent in Greece, and unemployment among young people has soared to 55 percent.

 The question now is if Greece can in any way be trusted. The outrageous obsession by some in the euro zone to keep the failing and tenuous region together appears to at this time, be willing to be done at any cost.

But Greece and other economically failing states have exposed the soft underbelly of the agreement, and it's only a matter of time before some of these states are required to take real austerity measures in order to get their loans, or they'll be forced to go back to operating economically using their own currencies.

 At this time the will to save the European Union remains strong, and some leaders will continue to take the misguided and immoral steps to keep it together no matter who it hurts. That can only go on for so long before outrage from the productive workers and markets that are more free than the failing socialists governments weighing on economic Europe, rise up and rebel against those parasitical states that continue to drain the coffers of the region.

 Those wanting to use Europe as the stepping stone for a new world order know this could set them back for many years if it fails now. They are doing everything to ensure it doesn't, but the fallout from those efforts could trigger even more problems than the fall of the EU, euro and euro zone would bring.

At this time is appears it doesn't matter to those attempting to lead this attempt at a global coup.

Mario Draghi Catches Shorts by Surprise

The assertion by ECB President Mario Draghi that he will do whatever is needed to save the euro had shorts scrambling to cover their positions.

After his comment, he ended the assertion concerning supporting the euro and what will be done by saying, "... believe me, it will be enough."

Many pros said his comments put a floor on the market.

It seems this is what traders and investors were looking for: more than just Ben Bernanke and the Federal Reserve pointing to intervening in the market with more stimulus.

The market's response shows it was looking for more support than the Federal Reserve, and now they've got it. If China visibly stimulates, it'll send the market soaring, the U.S. dollar plunging, and gold, silver, and other commodities much higher.

Of course this floor is one that can only last so long if measures aren't taken, as the market will then know it was either a general bluff, or something that won't be done until the situation reaches certain levels.

But with Greece surely going to exit the euro and Spain being bailed out, stimulus will surely come sooner than later.

That's the real story emerging over the last couple of days: what looked like a questionable possibility of QE3 in America and stimulus in Europe, now has ramped up to a very short-term window. That's what's moving the markets, not just the usual token statements that central banks stand ready to simulate if need be.

It appears the political pressure and weakening global economy has put the central banks on notice, and they are surely going to do something very soon.

And now with the comments of Draghi, it seems that it's not only immanent, but the size of the stimulus, at least in the case of Europe, appears to be gargantuan.

At least that's the corner Draghi has painted himself into. And anything less than something stupendous would now have a detrimental effect on the markets.

Whether or not all of this is political theater or not remains to be seen. But for now, it appears the plummeting stock market has been halted as traders await where central banks will go next.

If Bernanke and the Federal Reserve stimulate in the next several days at the next meeting, and Europe quickly follows, it would cause some huge upward moves in the market, and even hammer the shorts more than they are getting hammered now.

For gold and silver, they are going to soar as the U.S. dollar falls in value against the euro and other currencies, as will other commodities which are traded in U.S. dollars.

Commodity Surge doesn't support stimulus in any way, but it's going to happen, and we do need to be careful of how long the false supports will remain in place.

Most of us know throwing money at the problem hasn't and won't work, but we do like the predictability of the market immediately afterwards when unwarranted optimism gets investors all worked up and investing irrationally.

That will happen tentatively in the very short term, and when stimulus is announced, stocks and commodities will soar.

Now there is even more pressure on Bernanke and the Federal Reserve to stimulate quickly. If they don't, the effects of the Draghi announcement will quickly dissipate and his words forgotten.

That would in turn reverse the pressure and put it back on the ECB. Now that would make things interesting wouldn't it.

Either way, someone is going to stimulate soon, and whether it's the ECB or Federal Reserve first, it won't take long afterwards for the other to follow.

This is going to be a very interesting ride going forward, with conflicting data and results causing a lot of uncertainty and caution in the markets, while at the same time pushing investors to enter in.

Commodities Fall on Greece, Economic Worries

Fears Greece may exit the euro has put pressure on commodities, as concerns it would lead to a domino effect, which could result in Spain, among other countries, abandoning the euro as well.

That would lead to a period of chaos in the region, which when combined, is the largest market in the world.

Not too many people are concerned about Greece itself, as it's largely irrelevant. It's what Greece represents in regard to other countries that strikes fear in the hearts of leaders in the region, as it does those who have been attempting to peddle the concept of a one-world order.

That and concerns over China, Japan and the United States, all of which seem to have economies that are slowing down, has commodities under extreme pressure, aided by the rise in value of the U.S. dollar against the euro, as well as other major currencies.

Because commodities are bought in U.S. dollars, that makes it more expensive for those trading in other currencies, exasperating the problem. That's why the price of gold and other commodities have been plummeting.

In Japan, machinery orders dropped 2.8 percent in March, while in the U.S. retail sales fell to the lowest growth level in April for 2012.

The Dollar Index was in positive territory for the 13th day in a row - a record, while the euro plunged to its lowest level in four months, falling as low as $1.2681.

As for Greece, until that situation is resolved, it appears commodities prices will remain under downward pressure. Even though nothing has really changed economically with the failure of the country to form a new government, the market is acting as if this is something new and that Greece is actually serious about austerity measures and paying back its debt.

If Greece does exit the euro, which, over time, is almost a surety, that could have a dramatic impact on commodity prices and the global economy because of the very real and legitimate concerns over what is going to happen with Italy, Portugal, Ireland and Spain.

That of course translates into the euro zone, where the inability to project the short-term future with any clarity will hinder the ability to obtain funding, and even if businesses and banks could access funds, it's highly unlikely they'd take the risk with the specter of uncertain growth weighing on them.

One thing that could quickly change that is the introduction of another round of quantitative easing, which would temporarily give the global economy a boost, but at the growing risk of even more debt, which already can't be paid down by governments that promised the moon to their people but are now reaping the whirlwind because of the failure of Keynesian economics.

While there is no doubt the commodity bull run isn't over, we are in a correction that seems to still have longer to go before commodities begin their upward climb in prices again.

This is why the U.S. dollar is the perceived place of safety for investors, even though currencies around the world, including the greenback, have been devastatingly debased.

Gold Prices Today Plummet on South Korea, U.S. Dollar, EU Sovereign Debt

Several market forces are pushing the price of gold down today, as concerns over Ireland's sovereign debt has the euro under pressure, pushing up the value of the U.S. dollar, while pent-up concern over the probably of Asian countries raising their interest rates become a reality, as South Korea was the first to take the action to battle inflation. Most thought China may first take that step.

South Korea raised their interest rates by 25 basis points to 2.50.

The U.S. dollar index rose in response to the weakened euro, gaining $0.79, increasing to $79.14 earlier in the day.

Interest rates became a major concern when China revealed their consumer price index was higher than expected, reaching 4.4 percent, generating speculation they would raise interest rates to combat inflation.

Gold prices will probably remain under pressure until the interest rate scenario plays out, the continual uncertainty surrounding the European Union sovereign debt crisis is handled.

The problem with the European sovereign debt crisis is there appears to be a lot of shady dealings and data still being presented as the condition of some countries, as Greece has again stated their numbers are probably lower than believed concerning their deficits.

Socialism isn't sustainable, and these countries better stop their entitlement programs and mentality before the region becomes an economic graveyard. They're already well on the way.

Once the Ireland situation is taken care of, or at least a bailout is accepted by them, the euro will move stronger against the U.S. dollar, helping gold to rebound again.

But there will still be the interest rate scenario left to play out, which when Asian nations announce they're going to raise them, will cause pressure to again be brought on gold prices in response.

It looks like we're going to end up having opposite economic pressure on gold, which will probably result in a lot of volatility until the narrative is more clear.

Spot gold prices have fallen by over $26 an ounce as of about 2:00 PM EDT.

Teck (NYSE:TCK), BHP (NYSE:BHP), Freeport (NYSE:FCX) Slump on Stronger U.S. Dollar

The ongoing recession has metal producer like Teck Resources (NYSE:TCK), BHP Billiton (NYSE:BHP) and Freeport-McMoRan Copper & Gold Inc. (NYSE:FCX) down today, as the dollar strengthened, lowering the appeal of commodities.

Concerns over the continuing sovereign debt crisis in Europe is the major impetus behind this, as the focus goes back on the EU after being given a free ride in the press for some time.

Confirming what we and others commented on concerning the pathetic "stress tests" which made it appear the sovereign debt holdings were in better shape than they actually were for European banks, now they are again under pressure as the real story of their condition has yet to accurately be told, and we can almost be certain they'll be far weaker than thought.

Yield spreads for Germany and Greece were at their widest levels since May, and the gap between yields on 10-year German bonds and Portuguese and Irish debt are at the highest levels in history.

German bankers said Monday the ten largest lenders in the country may have to raise an additional $134 billion in new capital, underscoring their weakness.

Copper prices dropped on the news as demand issues were raised in light of the revelation things aren't as good as they were asserted in Europe.

US Dollar Crushed by Major Currencies

The US dollar got clobbered today as interest rates will be held down by the Federal Reserve for some time to come, as inflation remains low for the time being in the U.S.

Questions as to whether or not we've ever escaped the recession are increasingly being asked, as no jobs are being created in the private sector and housing remains in terrible condition, and is expected to worsen.

We still haven't seen the full effect of the commercial property market yet either, which is supposed to be in trouble over the second half of 2010.

The illusion the sovereign debt crisis in Europe has been handled because Greece has been able to auction bonds in the private markets is a real stretch, but that has strengthened the euro some for now, another downward pressure on the dollar.

Based on Wal-Mart (NYSE:WMT) starting a food price war to draw consumers back to the store, food prices dropped strongly in June, as they and competitors fought for foot traffic.

Consequently, the producer price index sank by 0.5 percent, after a 0.3 percent fall in May. Economists were said to be looking for 0.1 percent, but to me should have known better with the move by Wal-Mart and its competitors.

The dollar fell to 1.2910 against the euro, its worst showing in over two months.

Citigroup's (NYSE:C) Pandit: Euro Not Going Away

According to Citigroup (NYSE:C) CEO Vikram Pandit, he and the giant bank believes the "euro is here to stay."

Pandit added, "I think we are going to look at this as another one of these issues that we’ve put behind us."

Pandit also offered praise to how the European Union handled the situation, saying it was a "very good job," on Bloomberg television.

What was the good job? They simply through money at it to the tune of $975 billion. What's so great about that?

But then again we must consider the source, as Pandit was at the helm of Citigroup as it had to get taxpayer dollars in order to survive. So the idea to throwing money at problems is about all big bankers like Pandit can see as a solution to challenges like these.

Many analysts and investors believe the euro can't survive this crisis because Europe refused to defend it by allowing the situation to play out in the countries, showing them they were serious about adhering to the financial rules of the EU.

The euro of course won't immediately fail, but definitely could sometime in the next decade or so.

Nouriel Roubini: $1 Trillion Won't Fix Europe

NYU professor Nouriel Roubini said in an interview on tech ticker that the $1 trillion attempt to bail out Europe will fall short, and it's not the amount of money, but the fundamentals which led to the problem in the first place which will haunt the euro-zone for years into the future.

Roubini stated that all the $1 trillion will do is kick "the can down the road," and they'll have to face a similar problem again.

He especially noted how long it took Germany to implement austerity measures to be able to compete on a global basis, taking 15 years to change the private sector so labor costs reflected the market. With the countries like Greece, Portugal, Italy, Ireland and Spain, that probably isn't possible, as they lack the ability to deflate their currency to make it possible.

Roubini said even if these countries had the will and started today, it'll take years for them to make it happen, and it's questionable if they have the political will or if their people won't start riots and extraordinary civil unrest is the result.

The socialist, entitlement culture of these countries has brought all of this on, and now that it's time to pay the piper, there really aren't any answers over the near- or mid-term which will solve this problem.

This is why governments around the world need to quit spending and making promises that simply aren't able to be fulfilled, or be sustainable over a long period of time.

There could be huge amounts of violence and riots as austerity is forced on these countries in order for them to survive economically, and for the member states of the EU to pay out so much money, with their own citizens in many cases already upset over having to pay for their irresponsibility.

With the probability of higher tax and lower government spending, there are no guarantees any of this will work, and if the people in the countries will be willing to take it or not.

Roubini also believes these two measures will lead to a recession and possibly deflation, which would make it even more difficult to implement austerity measures on the people.

All of this because politicians and central banks won't say no. They've created a monster, now they have to deal with it.

To create a generation of people who believe they're entitled to what they are handed out by the government is a disaster, and all of us know when people are treated that way, when you say they can't have it any more, all hell will break loose, and we've already seen glimpses of that in Greece.

This won't work like politicians think it has worked during the recession, as the amount of money and the people being affected aren't the same as those in Asia, the U.S. or the UK. These people believe they should be able to continue receiving their handouts from the government in its various forms, and they don't want to hear anything else.

The bailouts in other areas of the world bought time, and even though we really aren't sure it has bought enough time, it has some possibility of working, although there are still a lot of consequences like inflation which will have to be dealt with.

But with the length of time it'll take for the PIIGS to change their economies and entitlement culture is many years, and $1 trillion can't buy that kind of time, or even close to it.

This is what Roubini means by kicking the can down the road. There simply isn't enough money to save these nations, and already the Federal Reserve has reportedly sent a bunch of money to banks in Europe to lend out. How long will Americans put up with that once they're clued into what's happening?

In the end, these countries will fail or fall into chaos, as a generation of those receiving redistributed money and perks find out there's no one else to take money from.

Marc Faber: Boot Greece!

Marc Faber said recently the European Union should boot Greece out of the European Union, and any other country which refuses to operate within the parameters laid out by the EU.

Talking to Bloomberg, Faber said, "The best would be to kick out Greece and the countries that abuse the system. They didn't have the fiscal discipline that was essentially imposed by EU."

Attempts to paint Greece as unique to the EU is ignored, as the threat of sovereign debt contagion is real, and there's little that can be said to convince us that things are different than that reality.

Jim Rogers has called for the EU to just let Greece fail, as another way of dealing with the situation, in order to show they are serious about the euro and countries adhering to the guidelines put forth.

Until government is limited, central banks closed down, and the culture of entitlement dealt with, there is very little that can be done to change things, the reason this is only the beginning of the sovereign debt crisis, which threatens to engulf the world.

Jim Rogers, Marc Faber Investment Advice

Jim Rogers and Marc Faber recommend investors cut back on their holdings in equities after the expected market correction happened yesterday which eliminated over $1 trillion in market value in the U.S.

Both Rogers and Faber said the market had been due for a correction, and it not something to be overly worried about, at least not yet.

While the 3 to 4 percent drop was a large number, Rogers said at this time it's no reason to panic. Faber believes this is the beginning of an ongoing decline in market value for some time to come.

Rogers addressed the Greek sovereign debt crisis again, reiterating it will be a good thing for Greece and the euro if they default. Even so, Rogers added fears of contagion could create an unstable market which could go on a wild ride, and that contagion isn't limited to the southern nations in Europe, as it could easily spread to the UK and the United States, said Rogers.

Faber's advice was for investors to decrease their positions whenever the share prices rebound, while Rogers continues to advise investors to invest in raw materials and agriculture.

BHP Billiton (ASX:BHP), Rio Tinto (LON:RIO) Fall on China Fears, Sovereign Debt Concerns

In a very short time, resource companies like BHP Billiton (ASX:BHP) and Rio Tinto (LON:RIO) have fallen on not only the obvious concerns of the sovereign debt crisis in Europe, but possibly even more important, the apparent cutback by China in their housing market could result in demand for commodities to fall.

Suddenly everyone that has been citing China as the reason for confidence in growth going forward has to reevaluate their businesses and possibly readjust their estimates for revenue and earnings.

Oh yeah, then there's the misguided 40 percent levy by the Rudd government which has disrupted the markets for mining companies with a large presence there, and could end up being a disaster.

So overall, in just a couple of weeks or less, optimism on earnings and revenue have plummeted to companies again taking a more defensive posture in a quickly changing economic environment.

Euro Continues Freefall - 13 Month Low

The euro continues to disintegrate in the face of the reality the bailout of Greece may only be the beginning of sovereign debt problems in Europe, and questions on whether the EU can handle what they're facing lingers in the back of everyone's minds.

Against the U.S. dollar, the euro plunged to down to $1.2994, the lowest level since April 2009.

The more the EU offers Greece aid, the less seriously the euro is taken, as some like Jim Rogers believe they should let Greece default on their debt in order to show they take the euro seriously. Unfortunately that doesn't look like what's going to happen, and there's sure to be a domino of nations coming begging for money in the near future once Greece gets theirs.

What all this is saying is the markets don't believe the $144 billion being put together to bail out Greece will do much to deal with the extent of the problem, and they're probably right.

Analysts continue to downwardly revise the value of the euro, as they don't see an end in site as to how far it'll drop.

Marc Faber, Jim Rogers on Greece Bailout

In a Bloomberg interview, Marc Faber reiterated what billionaire Jim Rogers has been saying for some time, and that is that Greece shouldn't be bailed out by the European Union or the IMF, as it's only postponing the inevitable, and rewarding excessive consumption.

By excessive consumption, it means the people of Greece being given handouts from the Greek government which the Greek government couldn't afford to pay.

That is obvious to everyone now, but it was hidden from their fellow European neighbors, who are now foolishly ready to bail out Greece, which will only postpone the crisis temporarily while inviting more countries to the postponement party.

Jim Rogers has stated in the recent past a number of times that if the EU was serious about the euro, they would allow Greece to fail so the rest of the EU countries with similar irresponsible financial practices will start getting their houses in order and implement much strong austerity programs.

In other words they need to cut down on spending and eliminate a lot of the government sponsored and central bank enabled programs and perks that are in no way sustainable. It's also another way of saying governments need to get smaller and central banks hopefully some day eliminated as being a part of the financial network around the world.

Faber adds that Greece, when looking at it in a similar way as you would any corporation, should be allowed to go bust and no loans should be extended to them.

Also banks holding loans should write off the loans from 30-50 percent of the face value of them.

In the end, all this will do is lead to the ultimate bust in the view of Faber, who says the only thing democracies are doing now is postponing everything until it all blows up in their faces. They will never escape this, and eventually they'll all have to pay the price.

Loans simply don't take care of the reason behind the crises in Europe and the other democracies, and the only tool in Faber's outlook they have is the tool of postponement by loans. There is a day coming when postponement will no longer work and the entire system will collapse under the weight of entitlement and political expediency.

Caterpillar (NYSE:CAT), Alcoa (NYSE:AA) and DuPont (NYSE:DD) Drive Dow Down

One day stocks like Caterpillar (NYSE:CAT), Alcoa (NYSE:AA) and DuPont (NYSE:DD) can lead the Dow up, and other days it can lead them down, and today it was downwards these stocks led the Dow, as it plunged the most in one day since February 4, declining 213.04 points, or 1.9 percent, to 10991.99.

Caterpillar dropped 4.35 percent, Alcoa 4.34 percent, and DuPont 3.8 percent during regular trading hours.

Most of this is in response to the downgrading of Greek debt to junk status and also the downgrading of Portugal debt down two levels, confirming the European Union problems are far deeper than Greece alone, and is in grave danger of crumbling under the weight of irresponsible monetary practices which gave in to demands of their people for wages and benefits they couldn't afford to offer them in a sustainable way.

Gold was driven up in price as the preferred safety haven in light of the extraordinary sovereign debt challenge facing Europe.