"Source One International"- Will ECB Begin Quantitative Easing?...

Online, May 7, 2010 (Newswire.com) - "Source One International" reportedly believes that the European Central Bank may be forced to launch its own program of quantitative easing if contagion from the Greek debt crisis continues to punish the bonds of Portugal, Spain, Ireland and Italy.

Yields on sovereign debt issued by the remaining PIIGS nations have risen markedly since the announcement of the finalization of a bailout for Greece which has led to calls for the ECB to begin printing money.

"Source One International" analysts say, however, that the ECB has far more legal and political restrictions on what it can do than the US Federal Reserve or the Bank of England and, in any case, the program would be fiercely contested by Germany which has all-too-painful memories of its Weimar era and the hyper-inflation that contributed to the rise to power of Adolf Hitler.
Doing nothing, however, means that the Greek situation is likely to spread to other Eurozone countries and eventually result in the loss of confidence in the single currency.

"Source One International" said that gold remains the safe-haven of choice among its strategists and pointed to the metal's ability to hold firm despite the sharp sell-off in equities and other commodities since Monday. The firm said that whilst the US dollar appeared to be strengthening as markets churn, investors needed to remember that the greenback was effectively "the best of a bad bunch" and still represented a country with serious debts and huge unfunded liabilities.