Episode 103: GoldMoney’s Alasdair Macleod talks to Félix Moreno de la Cova – who is a private trader, student of economics, contributing author for GoldMoney and Madrid resident. They discuss Spain failing to reach its deficit target and if the country still has any hope of escaping its debt trap.
Though Spain is in a difficult economic situation, Félix says that the deficit target was actually reachable if they hadn’t bailed out the banks. He explains how a different route – the internal capitalisation or “bail in” – wouldn’t have hurt taxpayers. By not meeting the deficit target, Spain failed to keep the markets patient and is now again facing an uphill battle. Due to the size of its economy a bailout of Spain could be the breaking point for the eurozone.
Though Spain is already facing tough times, with skyrocketing youth unemployment, Félix expects the situation to significantly worsen. However, he says that there is still time for the government to make the hard decisions and balance the budget. Referring to precious metals, Félix states that the fundamentals for gold could not be stronger and he also sees strong technical support on the charts. He also makes the point that given the on-going currency wars, gold is actually still making highs in different currencies.
You can also follow Felix on twitter @flix1.
This podcast was recorded on 25 February 2013.