Subscribe for 12 months with recurring billing - $199

Buy 12 months of subscription time - $199


Search Silver Prices
Silver Price
[Most Recent Quotes from] Our RSS Feed

Silver Updates by Mail

Enter your email address:

Follow Us on Twitter
« Supply-side constraints may hit BRICS: PM | Main | The [Recovery] Has No Clothes »

Spain to slash spending as economy slumps back into recession


Spain’s fragile economy has fallen back into recession and the country faces a year of grinding economic decline as premier Mariano Rajoy slashes spending yet further to meet EU demands, according to The Telegraph.

The Bank of Spain said the “contractionary dynamic” in the economy continued into early 2012 for the second quarter in a row, with an “intensifying” pace of job losses. It expects GDP to fall by 1.5pc this year.

Mr Rajoy said at a meeting in Seoul that he would press ahead later this week with a “very austere budget”, ordering 15pc cuts in spending across the ministries.

The conservative leader promised a “fair and just” distribution of pain. Public sector salaries will be frozen rather than cut and there will be no rise in VAT.

It is unclear how he can slash the budget deficit from 8.5pc of GDP last year to 5.3pc to meet the compromise target agreed with Brussels after a bruising confrontation.

It is frankly impossible, given that it would aggravate the recession and this would crush state revenues,” said Jesús Fernández-Villaverde from the University of Pennsylvania.

Fresh data from Spain’s treasury showed the deficit for January and February was worse than for the same period last year, even stripping out “one-off” costs stemming from excesses by the regional juntas.

The lack of progress is grist to the mill of critics who argue that drastic “pro-cyclical” cuts can prove self-defeating, as Greece has discovered.

Spain’s unemployment rate is already 22.8pc, rising to more than 51pc for youths, the highest since records began.

While the Spanish have so far accepted austerity with stoicism, serious protest is emerging and the main trade unions have called a general strike for Thursday.

The strike takes us closer to Greece and farther from Germany,” said Miguel Martin, head of the Spanish banking federation (AEB), calling the move “absolutely pointless”. He added that Spain’s banks had lost a record €2bn (£1.67bn) in the final quarter of last year as the property bust deepened. “The banks are taking the full brunt of the crisis, and are not yet saved,” he said.

El Pais reported that the European Commission is prodding Spain to tap the EU’s bail-out fund to help restructure the banking system and head off a serious credit crunch.

EU officials said the Spanish government’s plan for €52bn in extra provisions from the banks will not be enough if the crisis continues. Madrid denied that there had been no “formal request” from Brussels.

Spanish lenders have increased their dependence on loans from the European Central Bank to a record €152bn, using the money to roll over debts or buy Spanish government bonds – concentrating risk further.

The Madrid bourse fell 1pc on Tuesday, the sixth day of declines, dropping to its lowest level this year.

Yields on 10-year Spanish bonds have crept back into the danger zone – decoupling from Italian yields – on fears that Spain’s crisis will prove intractable despite ECB largesse. They settled back slightly to 5.36pc on Tuesday.

Officials in Germany said Spain is reaping the bitter fruit of its own actions in unilaterally tearing up its original budget targets and picking a fight with the EU.

The yields are the proof. They are paying the price,” said a top member of the Bundestag’s finance committee.

Fitch Ratings said the upward revision in last year’s deficit from 6pc to 8.5pc of GDP had damaged Spain’s “fiscal credibility” but the agency did not blame the new government of Mr Rajoy for the failings.

Fitch said the 3pc deficit target for 2013 imposed by Brussels was “unrealistic”.

Regarding In 2011 we outperformed

Gold by 31%,

Silver by 41%,

S&P by 42%

HUI by 53%.

Our model portfolio is up 445.53% since inception

An annualized return of 91.38%

Average return per trade of 36.17%

97 completed trades, 88 closed at a profit

A success rate of 90.72%

There will be a price increase on the Sunday 8th April 2012, so if you thinking of joining a winning team, do it now and lock in a low price.

The new fee structure is as follows:

$199.00 will be increased to $499.00 for 6 months

$349.00 will be increased to $799.00 for 12 months

We encourage you to do the due diligence and also to compare us with other services in order to satisfy yourself that this is indeed the right service for you.

Existing Subscribers should note that this increase will not apply to them and will only apply to new subscribers and that all of our current subscribers will continue to subscribe at the rate that they signed up for originally. So those who joined us when the subscription fee was $99.00 will continue to pay that very same $99.00. We hold rates for our existing subscribers as a reward to them for their loyalty to us, which we very much appreciate.

Also many thanks to those of you who have already joined us and for the very kind words  that you sent us regarding the service so far, we hope that we can continue to put a smile on your faces.

To stay updated on our market commentary, which gold stocks we are buying and why, please subscribe to The Gold Prices Newsletter, completely FREE of charge. Simply click here and enter your email address. Winners of the GoldDrivers Stock Picking Competition 2007  

For those readers who are also interested in the silver bull market that is currently unfolding, you may want to subscribe to our  Free Silver Prices Newsletter.

For those readers who are also interested in the nuclear power sector you may want to subscribe to our Free Uranium Stocks Newsletter, just click here. 

PrintView Printer Friendly Version

EmailEmail Article to Friend

Reader Comments (1)

More on how well the EU is taking care of their members Financial Problems...
Who believes that precious metals are passé?

March 30, 2012 | Unregistered CommenterDon

PostPost a New Comment

Enter your information below to add a new comment.

My response is on my own website »
Author Email (optional):
Author URL (optional):
Some HTML allowed: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <code> <em> <i> <strike> <strong>