“The weakness in the Dollar creates a bit of demand for gold which we saw most of last week, by mid day today, the euro was slightly down, the USD up and Gold was slighlty down at 1723.45usd, while the EUR/USD was trading at 1..3163. Greek lawmakers having approved a fresh austerity package, including public sector layoffs, minimum wage reduction and pension cuts and a reported 80,000 people protesting in the streets and reports said up to 50 buildings were firebombed.
Antonis Samaras, leader of the New Democracy party and widely tipped as Greece’s next prime minister, expelled 21 members from his party for voting against the measures. Former prime minister George Papandreou, leader of the socialist Pasok party, also expelled members who did not support the measures. Creating several problems for the EU and the ECB, the question is would the new government be able to support these measures and was the vote actually legal after a huge numbers of politicians either resigned or were removed.
Eurozone finance ministers are due to meet on Wednesday to review the new agreement, and potentially sign off Greece’s EUR130 billion second bailout. This in turn should pave the way for a deal with Greece’s private creditors to reduce the country’s debt burden, as well as stave off a default on March 20 when EUR14.5 billion of 3-Year Greek bonds mature.
The government may yet find that approving the new measures…proves to be far less of a challenge than implementing them in the months ahead.
A Quick Look Around the World Tuesday Afternoon
The markets are still looking for more measures out of Europe before it see a sustainable risk once could expect gold prices to hit resistance at $1760 per ounce. That will be the first resistance and the second one is at about the $1800 level. For gold to break the $1800 level, the markets would need a default.
In London the latest Bank of England figures relating to Project Merlin – the agreement between the UK government and British banks aimed at promoting lending to business show that banks loaned ?214.9 billion overall to business in 2011, against a target of ?190 billion. This should have had some positive results on the UK economy especially in employment, but the only up data has been in the manufacturing sector. Although recent news has cast a very ominus look at small to medium size business closing
The target for smaller businesses was missed, with ?74.9 billion lent versus a target of ?76 billion. The final quarter of last year saw a 3% drop in net lending.
China’s government has ordered the country’s banks to begin rolling over its loans to local governments, according to the Financial Times. When the global financial crisis broke in 2007-8, the state launched a massive stimulus program. Local authorities in China now have debts worth an estimated $1.7 trillion the FT says.
US president Barack Obama yesterday called for higher taxes on millionaires and wants to spend billions on infrastructure projects to create jobs as part of his 2013 budget proposals.
“I think there is pretty broad agreement that the time for austerity is not today,” White House chief of staff Jack Lew said Sunday.
Obama is expected to repeat his call made during his State of the Union address for the introduction of the so-called Buffett Rule, which would see millionaires pay a tax rate of at least 30%.
Originally posted here
