Tuesday, January 4, 2011

Guggenheim CIO:European Debt To Play Out In 2011

Scott Minerd,Chief Investment Officer at Guggenheim Partners,notes that every bank in Europe has some exposure to sovereign debt risk or some other European bank.There's a lot of stuff hidden under the carpet here.
There's gonna be some precipitating event,such as an Irish bank run.The Irish government doesn't have the resources to fully pay the deposits off.The European Central Bank has the printing press.
Already,5% of domestic deposits and 20% of foreign deposits have been withdrawn from Irish banks.The ECB will ultimately resort to printing money.I think this a 2011 event.
In the first half of the year,we will begin to see these events play themselves out.We'll be dealing with the ramifications through the second half of 2011.
We're positioning our clients to be long gold and credit protection in France,Germany and Italy.This is also a money-making opportunity,Mr.Minerd believes.
Guggenheim Partners is a global,diversified financial services firm active in money management,advising,investment banking and merchant banking.It operates from offices in the U.S.,Europe and Asia.

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