Turmoil in Europe

European stocks are down quite a bit this morning and some asset allocation programs seem to be pushing US stock futures down a lot, too. S&P futures are down about 18 pts as of 5AM ET.

Gold is up $20 to around $840. Oil is up to about $98.6. The Euro is up to 1.468; the pound to $2.10

There doesn't seem to be any significant news yet. ECB tough talk is driving the Euro up.

Longer term, I think Persian Gulf and Russia money is moving into euros and gold to diversify. They spend most of their money in Europe, so it makes sense. There is talk of Chinese diversification, too. For that to happen, China must de-link from the dollar.

For decades the US with its free markets and low regulation has been a great place to invest. That is good, but it also led to an overvalued currency that hurt exports. That has been and is still correcting itself before our eyes. Exports are surging, export industries and jobs are growing. So far US consumer prices are not strongly affected as many imports are from countries with dollar links like China. Basic materials and oil are priced in dollars.

Let's see how the ECB reacts. They need to step up and provide Euros to meet demand. This will maintain the global money supply growth as the flow of dollars overseas contracts.

NOTE: I will be traveling to NYC later this morning until Friday around noon. So posts might be sparse. I should be able to post a blog tomorrow, but not Friday until later in the day. Good luck. Be wary - beefers are stomping the mud in search of a new waterhole.

PS: This looks like a euro-panic. Euro-beefers or big euro-investors are probably doing big asset alloctions out of dollar, US stocks.