sounds familiar, page-4

Bazza d2, champion post T/U. The Eurozone and flow on effect is exactly as you state here and it does have a significant effect on FML, Australians, our banks, economy, property and our way of life.

No flack from me. Credit markets are in disarray, bonds and CDS disorderly - hence my approval that DT and CB + the Board have elected to put the line of credit in place (as posted by another FML'ers - nenz and perhaps others too).

Capital markets seem likely to collapse in the EMU due to their inability to align policy and ECB function to real life requirements - i.e unsustainable debt bubble and liquidity trap. This is a global issue - obviously.

Should this happen we get a smaller (or collapsed) Euro zone and risk off will be extreme as the ramifications spread throughout the financial system. This should however push gold and the AUD down along with the Aussie economy. This sits directly on your points bazza d2.

AUD gold would be maintained (roughly) IMO but companies without finance to develop assets may go to the wall - more M&A activity in the segment. FML may be able to pick up some very attractive distressed assets under this scenario, so would the other producers with cash flow - the more the better so cost important to restrain now.

Gold would go up in Euro, down in USD - capital flight initially to the USA. This will confuse many less informed investors. Our banks will struggle with funding and therefore capital adequacy requirements under the looming Basel3. Stocks will sell off initially if this is not managed carefully.

QE3 has to factor somewhere here as the Fed is set up to print unlike the ECB. This is where gold flies straight back up - when the contagion hits the USA and QE3 is forced on the Fed who will have to abandon their inflation concerns. This will be the beginning of the main event for gold stocks in a massive rally eventually culminating in a mania.

FML's path and destiny will be interesting throughout this process. You are right - most Aussies are sitting in the middle of road on a dark night looking at the pretty lights looming, but our job is to get as many people informed as we can - for those willing to listen.

Good luck to us all,
CW
DYOR&DD