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Gold And Silver Likely To Go Parabolic Due To ‘Global Shockwaves’ If U.S. Defaults
From Gold Core
Gold and Silver Likely to Go Parabolic Due to ‘Global Shockwaves’ if U.S. Defaults
Gold is some 0.5% lower against the U.S. dollar and most currencies today but is higher in Australian dollars as the Aussie fell on Australian and global economic growth concerns. Asian equity indices were mixed as are European indices.
Bond markets have seen subdued trading but Greek bonds are again under pressure and the Greek 10 year yield has risen to 17.37% in increasingly illiquid trade.
The dawning reality that the U.S. will be downgraded due to its appalling fiscal position led to new record nominal gold and silver prices yesterday.
Denial regarding the possibility of a U.S. default continues with some analysts denying that such an event is “possible”.
Such an event is possible and it grows more likely by the day.
US Federal Reserve Chairman Ben Bernanke warned overnight that a default on America's debt will spark a major crisis and send shockwaves through the global economy.
"The Treasury security is viewed as the safest and most liquid security in the world, and the notion it would become suddenly unreliable and illiquid would throw shockwaves through the entire global financial system," he told a congressional committee.
U.S. CDS - ZCTO CDS EUR SR 5Y Corp
US CDS has broken out to the upside and there is the potential for sharp moves up here as was seen in the aftermath of the Lehman and global financial crisis.
The fundamentals for gold and silver could not be better as the outlook for most paper currencies and government paper (sovereign debt) is not good. The precious metals are again being seen as safe haven assets to protect from government profligacy and currency debasement.
The risks of a “depression” and currency crises in Europe and the U.S. are rising and this is contributing to significant safe haven demand.
The fact that gold and silver have no counter party risk and cannot default and cannot be debased or printed into oblivion makes them crucial diversifications.
Gold, global equities and AAA rated, short dated bonds remain the best way for investors to protect themselves from today’s growing sovereign debt and monetary risk.
Gold, silver, good equities and good bonds will be better than depreciating cash or currencies in the coming years. Real diversification will help protect preserve and grow wealth.
NEWS
Gold pauses after record-setting rally; debt fears aid
http://www.reuters.com/article/2011/07/15/us-markets-precious-idUSTRE7592IU20110715
Gold Poised for Second Weekly Advance After Rallying to Record
http://www.sfgate.com/cgi-bin/article.cgi?f=/g/a/2011/07/14/bloomberg1376-LOCTJI0YHQ0X01 0SNO3DLKUC71NCR936FCO4714R.DTL
Gold, silver pull back in electronic trading
http://www.marketwatch.com/story/gold-silver-pull-back-in-electronic-trading-2011-07-15?link=MW_latest_news
US default would be disastrous - Bernanke
http://www.rte.ie/news/2011/0714/usa-business.html
COMMENTARY
US Default Risk Jumps To Highest Since February 2010 On Debt Ceiling Worries
http://www.zerohedge.com/article/us-cds-jumps-highest-february-2010-debt-ceiling-worries
11 Silver Investor Mentality Shifts
http://www.businessinsider.com/11-silver-investor-mentality-shifts-2011-7
Peter Brimelow - Gold: ‘The upside is wide open’
http://www.marketwatch.com/story/gold-the-upside-is-wide-open-2011-07-14?link=mw_story_kiosk
King World News: Capital controls, oppressive regulation likely after
collapse - Zulauf
http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2011/7/14_Felix_Zulauf_-_Collapse_Will_Cause_Governments_to_Change_Rules.html
Charlie Fell: Silver in a Diversified Investment Portfolio - Peter Whelan
http://www.charliefell.com/index.php/articles/2/174
The World of Yesterday - Ignore Reality at Your Peril
http://www.goldstandardinstitute.net/GSI/wp-content/uploads/2010/06/TheGoldStandard7.pdf
Return of the Gold Standard as world order unravels
http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/8638644/Return-of-the-Gold-Standard-as-world-order-unravels.html
»
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CNBC is saying everyone will panic and flee into U.S. bonds if this happens...Um. Why would people flee into the very default that is causing the crisis not paying creditors? Wouldn't you be almost guaranteeing your money to become illiquid and worthless?
The analysis is ridiculous. IF the US defaults then all assets priced
in dollars will fall- since this is the primary pricing currnecy of Gold
then Gold will be not immune to a proper collapse in its value.
Currencies are no longer pegged to anything and so cannot be 'debased', this
is a fundamental flaw in the logic. Moreover, why do you think Gold
will become that which backs the "new" currency? It doesnt make sense.
There are plenty of alternatives that would be more attractive than
Gold. An electronic currency is the best candidate in my opinion. I am
sick and tired of this "safe haven" argument for gold. Its a market thats
in a defined bull market since 2001, along with most other commodities.
IF the economy and general assets are doing well, Gold will probably outperform.
If shit hits the fan, it will decline along with the rest-- even if it
declines less-so it still declines. Retarded views, the lot of you.
You can keep you digits on a computer screen. I will hold physical gold and silver and I hope you sleep well at night. Correct, nominally gold and silver prices may fall but their purchasing power will not!
Tuco Benedicto Pacifico Juan Maria Ramirez
And how do you think the world will look if all paper currencies
are worthless and everyone is running around paying for stuff in PMS's?
Solutions will be made by the free-est market of all.. people. There
isnt enough G/S in circulation in order for it to work as a currency.
You cant have 6 billion people looking to trade when there are only
a million or so who will have this 'new' money. Seriously, retarded.
Oh, and fancy posting your tickets when you were buying G/S in the early
2000's?? Now that would have been foresight.
Good point. Barter, theft and mayhem will be the rule of the day. You may be able to buy a small city with an ounce of gold?
Tuco
You are confusing "means of exchange" with "store of value".
Many do.
HTH
Correct. Any "money" must be accepted by all parties as a store of value, before, during and after any transaction. There is no exchange possible otherwise. Otherwise you could just as well pay for something of value with empty promises.
Really, most do not understand what money actually is. My guess because of the incessant barrage of propaganda, propagating fiat money as extention of a banks' courtesy, instead of a fungible store of value, which fiat money is supposed to be as well. I'm angry because those that have no clue, in their stupidity are proposing to limit my abillity to conduct whatever transaction I like, by handing over control over it, and over my wealth, and thus my freedom, to a bunch of corrupt clowns.
Actually, that already happened, but they fail to make it stick.
Denail is not a river in Egypt.
Last monday and tuestday liquidity dried up in the euro. Gold behaved at that point as cash. That is all you have to know.
edit: cut some mud
IF the US defaults then all assets priced
in dollars will fall- since this is the primary pricing currnecy of Gold
Is it 'Opposite day' where yer to, b'y?
If the music stops, if your ass isn't in a chair, You are out of the game.
If you don't physically POSSESS your money, IT AIN'T YOURS.
If you have to rely on an ATM, a Teller, An Internet connection YOU AIN'T GOT IT.
Ask someone who was in Argentina in 2001ish who had a few hundred thousand Pesos in the bank and being told "You can only withdraw 1000 Pesos per month per account...
You probably don't even know what I am talking about.
Second thought, like the other guy said, go watch CNBC, my ass will be right here "IN A CHAIR." Good luck when the music stops.
I cut my reply a bit. Anger got the better of me. ;-)
CNBC is about right. Or over here any mainstream newspaper, tv or radio broadcast.
i'm getting my name changed to Parabolic.
Not Asymptote?
Am I misunderstanding something?
Doesn't the law specifically exclude skipping interest payments on debts?(as well as payments for surpressing insurrections)
So why are Treasuries threatened?
On the other hand, anyone who is on the entitlement train, or a gov payroll, may want to be making alternative plans
robobob,
You sir are correct...........that's why THEY Must raise the debt ceiling, period.
Total BS. They violate their own rules ALL THE TIME.
The most appropriate analogy and example is the USSR.
The USSA should follow the wise and prudent example set by the USSR... completely shut down and vanish.
GREEK BONDS have lost one-half to three-quarters of their face value. Six national strikes have all ended in violence already this year. In the three months to April, public investment spending fell 42% from the start of 2010, but total spending still rose – and tax revenues sank – forcing the budget deficit still wider as the economy shrank 5.5% year-on-year.
What to do? Greece’s debt cannot be serviced, much less repaid. Everything says default – stop paying, write it down or write it off, with or without the lenders’ consent. Default is certain, and history says it would be better for creditors if the restructuring came before Greece misses a payment.
http://blogs.forbes.com/greatspeculations/2011/07/15/why-europe-is-reall...
The US will not default. That simple. It's preposterous. This isn't 1971 any more.
...
...
...
But I have some gold and silver just in case.
Great summary....thank you Tyler for taking the time.
ZH is The Excellent!
I don't understand the hysteria about not raising the debt ceiling. We have had partial government shutdowns 17 times in the last 40 years.
http://firstread.msnbc.msn.com/_news/2011/04/08/6432513-this-would-be-18...
Some parks are shutdown, some paychecks are delayed. What's the big deal? or am I missing something new about this situation?
The dawning reality that the U.S. will be downgraded due to its appalling fiscal position led to new record nominal gold and silver prices yesterday.
What? Silver is still 20% off its recent highs. What a ridiculous assertion.
No kidding. I wonder how the author let that slip through.
In gold we trust.
In reality we trust.
In so-called authority we reject and despise.