Euro pummeling awaits

ECB's Balance Sheet Contains Massive Risks

There's no excerpt that will do the article justice.

S&P 500 falling to 400 and the ECB (or Greece, or Ireland, or Portugal...) as Lehman Brothers are a couple of the memes gaining traction. If there's a move down in the euro, we are still at the very early stages.

Below is the iShares MSCI EMU Index (EZU) versus SPDR Gold Shares (GLD). There was a slight uptrend from the end of the first Greek crisis, but this is in danger of breaking down.



Remember, this isn't about the insolvency of Greece (although Greece is insolvent). This is a story about the decline in social mood and the consequent rejecting of the pan-European experiment of the EU and the euro. The mood shift is manifesting as a financial crisis because that is the weak link in the chain.