Seven reasons why European banks are in trouble

Mises Institute/Phillip Bagus/5-17-2018

“Ironically, the ECB´s zero interest rate policy designed to promote credit expansion will finally lead to a credit contraction. There will be a severe recession and a fall in the money supply. The crisis will not only endanger the banking system but the euro as such, because troubled Eurozone government will try to recapitalize their banks through a monetization of newly issued debts.”

USAGOLD note:  The situation Bagus describes explains the strong demand for physical gold in Germany and other European countries.  A  large cross-section of the European citizenry has a very strong historical perspective passed through families as to what can go wrong with a banking system and why gold is a necessary ingredient in the properly designed asset portfolio. . . And now there is trouble brewing again on Europe’s southern flank.

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