Long-term interest rates of Euro-zone countries

World leaders continue to put pressure on Europe to form a solution to the sovereign debt crisis. These leaders assert that the unstable Eurozone poses a significant threat to the global economy. The consequences of this crisis are far reaching and even affect such varied industries as financing an auto loan or modular homes for sale. Several factors contribute to the looming threat of the European debt crisis including the tendency of emergencies to become dire when a timely solution is not reached. Also problematic is the “one size fits all” strategy that prevents diverse European nations to develop individual solutions. Although this crisis has reached epic proportions, some savvy investors have found ways to profit.

As history demonstrates, a widespread financial emergency becomes more severe when a timely solution is not found. Several factors have challenged the ability to come to a swift resolution of the European debt crisis. The one currency model of the euro has dissuaded countries with a healthier economy like Germany from coming to the table. Politics have also challenged a solution to this crisis as national leaders combine efforts to balance the economy with election strategies and political agendas. However, the inability to reach a swift solution is not the only challenge facing member of the Eurozone.

Some experts surmise that the current economic crisis felt throughout Europe is the effect of a “one size fits all” financial system applied to individual nations in the Eurozone. The governments of the sixteen nations of the Eurozone are varied and diverse. This is characterized by the wide gap in the rates of unemployment different countries report. A country’s first line of defense against widespread financial trouble is an increase in interest rates, but Eurozone countries are barred from this strategy as they are subject to interest rates determined by the European bank. Although this economic crunch is felt on a global level, some investors have found a way to profit.

Although the European debt crisis accompanies hardship and uncertainty, some American investors have found it offers a unique financial advantage. According to 18th century nobleman Baron Rothschild, “The time to buy is when there’s blood in the streets.” US investors who tout Rothschild’s business philosophy look for ways to benefit as European companies feel the pressure to divest assets. US investors can benefit when European companies struggle for financial assistance. The uncertain times of the European debt crisis have also spawned resurgence in the public’s interest in gold.

The financial crisis that has engulfed much of Europe has created a unique opportunity for gold investors. In times of economic unrest and fear, the public likes to invest in tangible assets like gold. Crowd psychology is a major determining factor in the valuation of stocks. Gold investors can take advantage of the shaky public opinion of the euro and encourage clients to invest in gold: a surer bet.

Global leaders hope to find a solution to the European debt crisis that has had a widespread negative effect on the global economy. Although this financial unrest has had far reaching consequences, a number of investors have found a way to benefit from the uncertainty.