French Bond Yields Control Political Decisions, Not Hollande

Pinnacle Digest writes: So now that the Greek and French elections are over (what a mess and thankfully we don’t live in those two countries) what will transpire economically, politically and in the bond markets?

In this latest article, Axel Merk explains how, despite a socialist running France, Francois Hollande’s extremist agenda will be short-lived once the bond market has its say. In the end, the bond market is making the political choices for nations in fiscal troubles. And much like France’s previous socialist leader, Francois Mitterand, who went from extremist to moderate in two years, Hollande will likely have to follow the same path.

Just look at what happened in Italy. The Italian Bond Market became volatile and shortly after, Berlusconi was gone.

Merk goes on to explain the dangerous situation developing in Greece now that a minority government, ran by Antonis Samaras, is sharing the power with a group of politicians who disagreed with the original terms of its bailout. It’s our belief that  Greece is on the exit path from the euro. This will create much volatility but in the end, the euro will be significantly stronger for it.

Read Axel Merk’s article on the subject by clicking here.