Euro Will Strength Through Addition By Subtraction

Market forces and economic reality, not rating agencies, have been tipping Greece closer to the brink. Rating agencies only specialize in locking the barn door after the horses have bolted.

In a surprise turn, the Euro continues to rally against the negative news flow. Clearly, capital sees something that the headline expectations cannot. For starters, it’s an alternative to the U.S. dollar. Also, capital is beginning to anticipate a contraction in the size of the European Union (EU). Essentially, the EU and Euro will strengthen through a process known as “addition by subtraction.”

Euro ETF (FXE)


Headline: Moody's downgrade tips Greece closer to brink

Moody's slashed Greece's credit rating by three notches on Monday, raising the specter that the distressed euro zone sovereign may be forced to restructure its debt, perhaps even before 2013.

The move increased pressure on European leaders to ease repayment terms on bailout loans to Greece, just as Germany and its allies appear to have turned their backs on radical steps to help Athens reduce its debt through bond purchases or buy-backs.

Source: finance.yahoo.com