I appeared on Howestreet.com's This Week in Money on Saturday where I focused on the surprising developments out of Europe. I make the case that with the announced nominees for EU leadership positions, Europe is paving the way for significantly more fiscal stimulus for its economy. I also make the case that the risks of eurozone disintegration have fallen given the nominations of pro-integration German cabinet minister Ursula von der Leyen as head of the EU Commission and former politician and IMF head Chris Lagarde to lead the ECB. Lagarde will likely spearhead the move for the ability of the EU to issue more bonds to increase government spending, particularly in the area of infrastructure. I also point out that the Lagarde nomination came the same week that Italy was let off the hook for going over its deficit limits.
In terms of investment strategy, I suggest that markets have not factored in the pro-growth dimensions of the new leadership. Over the next few years, we could see Europe trailblazing in the area of infrastructure development which will ultimately encourage the United States to undertake similar measures. It should spell good news for Canadian resource stocks. Cryptocurrencies could also benefit as government deficits start to grow and a monetary reset appears on the horizon, something I discussed in our July 2nd morning report.
You can listen to the entire show on YouTube (my segment starts at 47:15) or download my interview segment in MP3 format. Guests on the show also included Ross Clark who discusses market and gold technicals and Ted Butler who gives an in-depth opinion on the gold and silver markets.
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