Implications For Gold In The Aftermath Of The Greek Crisis

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Sun, 01/31/2010 - 17:06 | 212636 etrader
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Greece has around 112 tonnes of Gold.

That could potentially be off loaded into the market  as part of its debt restructuring program.


Sun, 01/31/2010 - 17:21 | 212652 10044
10044's picture

true, BUT if anyone were to offload gold, it would be the IMF and as soon as they do, the Chinese are there to devour it, heck they might even buy off market prices.

Sun, 01/31/2010 - 18:31 | 212679 etrader
etrader's picture

Shame BofA have overlooked this  potential 112 tonne supply overhang.?

Sun, 01/31/2010 - 20:13 | 212742 steve from virginia
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What was that you say?

Greece has 112 tons of debt? Since when are they weighing debt? That's bad ...

Mon, 02/01/2010 - 00:56 | 212936 Anonymous
Anonymous's picture

BUT that is awesome your thesis is based upon the actions of china.

Really, the shortcoming of mises is that given liquidationist theory assumes government screws the little people under the fed and how is china succeeding?

a lot of bankruptcy has occurred, where is the private society? Mises ouch.

Sun, 01/31/2010 - 21:58 | 212788 Reven
Reven's picture

Greece has a GDP of $357 billion (2008).  112 tonnes of gold is only about 1% of their GDP and debt.

Sun, 01/31/2010 - 17:13 | 212643 abalone
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Will the RBA's decision to raise interest rates in Oz reignite the USD carry trade later on this week in turn strengthening gold as inflation starts to rear its ugly head?

Sun, 01/31/2010 - 18:15 | 212678 SteveNYC
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I think the RBA may actually stand pat on rates this time around. However, they have done stupid things before, raising rates may strengthen the dollar, which is not what they need right now.

I'm 50/50 for a hold this time.

Sun, 01/31/2010 - 19:45 | 212725 Master Bates
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1.  Deflation, not inflation.

2.  USD rally.

3.  Gold breaks down from a descending triangle and plummets as the "gold bitchez" crew dumps.

The markets are on the brink here, and that includes all commodities too.  Pretty much all charts are bearish although potentially are bullish for the next week.

Sun, 01/31/2010 - 21:15 | 212766 dark pools of soros
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have you crushed your balls straddling that fence yet?

Sun, 01/31/2010 - 23:53 | 212868 MsCreant
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That is a really strange Master Bates technique.

Mon, 02/01/2010 - 06:43 | 213082 Crime of the Century
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Strokes of something other than genius...

Mon, 02/01/2010 - 04:36 | 213054 Hephasteus
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I think he's hanging from the fence upside down with the points of the fence skewering through his man sacks while singing a wonderful rendition of "Noboy knows the trouble, i've seen. Nobody knows my sorrow." In a strange tenor voice.

Sun, 01/31/2010 - 21:50 | 212784 Mr Lennon Hendrix
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Deflation vs. Inflation gets a second round.  Deflation won the last round 10 to 9.  It really did get close at the end, with gold's winter run up, not to mention Britain and China admitting inflation had commenced.  I am looking for a second round knockout from inflation.  Bernanke is back and with his lucky printing press in his corner.  gold and silver snitches....

Sun, 01/31/2010 - 23:28 | 212846 abalone
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Gold is teetering on the edge & BB's pill press (sorry printing press) stalling! Which way it goes tomorrow is critical. Another sell off would re-affirm deflation where as the usual Monday pump by the FED will confirm that the PSi levels are maintained.

Sun, 01/31/2010 - 17:17 | 212646 THE DORK OF CORK
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Etrader it would be interesting to see the Greek reaction to the selling of its families gold.

We could see these events moving from the economic to the Geopolitical sphere

I am no expert on Greek affairs but I can imagine the Greek army having a more important role in politics all of a sudden

Has anybody got any information about the role and importance of the Greek military in the political game at the moment

Sun, 01/31/2010 - 19:02 | 212698 peaceful
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good observation dork.. the scoop is that after the 7 yr regime of the colonels, greeks flocked to the left . The country at least until now, gives very little power to the military. The guy to watch for is Samaras--he may change this as he just won his party's election. He actually has some ties going all the way back to the colonels and he won the election on a somewhat "nationalistic" platform.


Sun, 01/31/2010 - 17:18 | 212648 xamax
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Mid and longer-term, this totally failed construction called European Union is not sustainable. Greece is only the top of the iceberg while Germany is by far not so strong as generally assumed. Sure UK has its problems but at least they were not so stupid to join the Euro.

Here a personal example on how the EU works:

A friend of mine works for the European Central bank (EZB). While he takes a nice salary, he is allowed to work more than half of the year fom home (home office). They have 2-3 times a year a so-called study trip (usually in a 5-star hotel) and can bring their partner with them (useless to say that all is paid by the EZB). That's how it works.      

Mon, 02/01/2010 - 10:13 | 213174 Anton LaVey
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1) It's the ECB, not the EZB (easy bee?)

2) Perks & all-expenses paid trip: how is that different from hundreds, nay, thousands of corporations out there?

You need to get around more.

Oh, and if you think Greece is a problem for the Euro, just wait until the UK defaults on its debt. That will do a lot of good to the pound sterling.

Sun, 01/31/2010 - 17:24 | 212654 10044
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The best clue to go long on gold came last week when [the criminal] Soros said gold's in a bubble. If he 'says' or 'indicates' he's selling, that's your clue to buy, because definitely he's a buyer.

Sun, 01/31/2010 - 17:45 | 212664 WilliamShatner
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I found it an odd statement, coming from Soros. 

He went long on gold starting 2 or 3 years ago, buying physical gold and shares in mining companies.

If you put his recent comments in context you can see he was saying that unsound fiscal policies by governments and the printing/creation of currency are setting the stage for gold to be "the ultimate bubble".

Wake me when the gold bubble gets as big as the dot com or real estate bubble, until then I'm continuing to buy gold.

Sun, 01/31/2010 - 17:52 | 212668 10044
10044's picture

"Wake me when the gold bubble gets as big as the dot com or real estate bubble, until then I'm continuing to buy gold."

sure, that'd be when it his $7k+

Sun, 01/31/2010 - 22:50 | 212822 Hephasteus
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Spends all day remodeling and repainting his gold. Man maintenance on this stuff is a bitch and expensive. I now know why it's so cheap.

Sun, 01/31/2010 - 18:11 | 212676 DavosSherman
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Agreed. Most folks the only gold they own is a gold ring, earrings or necklace. I haven't seen bidding wars or folks whipping out credit cards to buy it. Soros also holds as of Oct 09 263 million of GLD.

Sun, 01/31/2010 - 20:03 | 212736 MarketTruth
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Soros hold GLD... hmmm, maybe he knows they need to dump those tungsten plated gold bars for those with actual gold within them so is trying to lower the price of real gold bars?

Frankly, Soros must have an angle as only a fool would have anything to do with the GLD scam other than for perhaps a day trade.

ASK YOURSELF: do you really trust that these ETFs have the gold they claim and GLD's counterparties that store said gold are not leasing it out or creating/forming/leveraging some other paper gold on top of their paper gold. As an example, GLD can hold NOT GOOD bars for proper delivery to the market and they do not insure their gold holding. Add to that, there are many other serious situations one should consider before choosing GLD or other ETFs.

Read GLD's 10-k filing at and pay special attention to pages 54 to 62.

Bottom line, if you want to invest in gold i would do as GLD's largest shareholder did months ago.... they sold their GLD holdings and purchased physical metal and took delivery. In this day and age counterparty risk is to be avoided imho.

Sun, 01/31/2010 - 21:17 | 212768 dark pools of soros
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i heard Mr T is shorting gold next week

Mon, 02/01/2010 - 13:00 | 213315 TheGoodDoctor
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The gold ETF's are nothing more than the same thing that the banks do with their leverage. And if the COMEX is not delivering physical, then what is one to assume?

Sun, 01/31/2010 - 19:47 | 212727 Master Bates
Master Bates's picture

Real estate bubble, up 60% over its course.

Nasdaq, up 2-300% max over its course.

Gold up 400% over its course.

How is that not a bigger bubble?

Sun, 01/31/2010 - 23:28 | 212845 hack3434
hack3434's picture


Real estate bubble, up 60% over its course. USD coming down from the 120 peak

Nasdaq, up 2-300% max over its course. USD@120+-

Gold up 400% over its course. USD<80+-

How is that not a bigger bubble?

You do the math...


Sun, 01/31/2010 - 18:11 | 212675 etrader
etrader's picture

To quote:

"When I see a bubble forming I rush in to buy, adding fuel to the fire. That is not irrational" -( From Soros Introducing the theory of reflexivity).

Thats what the mainstream outlets missed when interpreting Soros bubble remark

last week.

Sun, 01/31/2010 - 19:10 | 212706 spekulatn
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Thats what the mainstream outlets missed when interpreting Soros bubble remark


Mainstream outlets are part of the wall street machine.

Nothing was missed.

Report the zig while the chosen 1'z do a  zag.


Sun, 01/31/2010 - 21:58 | 212789 Mr Lennon Hendrix
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Great quote; the mentality stands correct with GLD in respect to radar SoroS and his cronies.  have fools invest in gold etfs, have soros do it, have fools feel comfortable, have gold go up to $10,000 an OZ, announce that the gold is not real real gold, fools lose.  poor fools.  and i forgot to add the part when soros pulls his shares out before the news hits the street.  easy money, buy physical.

Sun, 01/31/2010 - 17:47 | 212667 SDRII
SDRII's picture

Putting aside structural flaws in the Euro construction, Jesse has the appropriate chart up on who own the gold...

Browns bottom and rumors of trouble in the
London Bullion market only compound the problems of overreach and bankruptcy. Perhaps that accounts for the strident Labour calls for action on Iran. Germany on the other hand is strinking business deals.

Greece = proxy. With the US flexing its military muscle in China this weekend re Taiwan, are their similarities to be drawn to the US threat during Suez to dump Sterling bonds?

caveat emptor

Sun, 01/31/2010 - 17:54 | 212669 10044
10044's picture

I totally forgot about LBMA's thing... absoloutely right, cirmex and LBMA could 'both' go broke if delivery fails. one can only hope (not Obama's kind of hope)...

Sun, 01/31/2010 - 17:56 | 212670 Anonymous
Anonymous's picture

OT No hijack intended...

Morgan Stanley looking into legal action against ZeroHedge

At the beginning of the week, financial research firm and industry online publication The Davian Letter posted a story that compared a Morgan Stanley research note written by Jim Caron to a story published by Tyler Durden at Zero Hedge. The Davian story laid out an argument that Zero Hedge was taking data charts fromMorgan Stanley research and printing them as its own. Phrases like “serial plagiarism” and “stealing of intellectual property” were thrown around. At first, it wasn’t clear if this was nothing more than a blogger war between two sites, which make their mark publishing unique market views, trying to clock the other out.

Then on Tuesday, Davian published another example that got the attention of the bank’s research team leader, who sent the post to his legal experts to determine if there was any real wrongdoing. Caron told the Greenwich Time he’d didn’t read ZeroHedge before this and had no further comment.

Today, we learned Morgan Stanley isn’t going the take the alleged research lift by online publication Zero Hedge lightly.

In a letter seen by Greenwich Time, Mitchell Bompey, executive director of legal and compliance for Morgan Stanley, writes “Morgan Stanley greatly appreciates your post by Dexter Morgan on Tuesday, January 26, 2010, exposing the plagiarism by Zero Hedge of recent Morgan Stanley research. We are reviewing that site now for possible legal action. Without your article, this abuse of our intellectual property may have gone unnoticed.”

A spokesperson for Morgan Stanley would not comment on the type of legal action the investment bank is thinking of taking against Zero Hedge. While we did hear a lengthy explanation from Zero Hedge that almost sidestepped the issues at hand, those connected with the Web site would not comment on the record, so unfortunately we can’t give you their side of the story. But we have no doubt they will publish one, on their own site, after this news comes out.

Sun, 01/31/2010 - 21:16 | 212767 merehuman
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ZEROHEDGE is my truth in finance hedge. I am everyman and no man begging you all to PLEASE  

dont mess up zerohedge.

Sun, 01/31/2010 - 22:28 | 212814 lynnybee
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.... my thoughts exactly...... love ZEROHEDGE ...... you find the truth on ZEROHEDGE ......sincerely.....

Mon, 02/01/2010 - 01:55 | 212981 faustian bargain
faustian bargain's picture

Um, yeah, I think you did intend a threadjack. 

Mon, 02/01/2010 - 03:27 | 213017 MsCreant
MsCreant's picture

And then some. Not exactly a unique post.

Mon, 02/01/2010 - 04:43 | 213058 Hephasteus
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It's kind of funny when you think about banks thinking they possess intellectual property.

I heard freddie and fannie made up a few hundred thousand counterfeit houses.

It's amazing that you can build houses with your mind.

Sun, 01/31/2010 - 18:07 | 212673 Anonymous
Anonymous's picture

USD will be lifted by the Greek drama/comedy. Whatever is done in Europe to resolve the crisis will damage the Euro and the European union.

Plan on what you will do if gold goes down in USD terms.

Mon, 02/01/2010 - 10:28 | 213187 Anton LaVey
Anton LaVey's picture

USD up, Euro down.

Most European countries are export-oriented countries. A cheap Euro makes their exports more competitive.

A strong USD is also a strong argument for investing in US Treasuries, which is exactly what the US Government wants you to do right now.

A match made in heaven.

Sun, 01/31/2010 - 18:17 | 212680 Madcow
Madcow's picture

Greece could sell their gold. So could the IMF to finance the bailout de jour. But there's a whole lot more "bailout" in the pipeline than there is gold. 

The amount of fiat money (both official and "shadow") that has vaporized DRARFS the total amount of all gold that has ever been produced. 



Sun, 01/31/2010 - 18:49 | 212694 jimmyjames
jimmyjames's picture

Zimbabwe-Iceland-Argentina-Viet Nam-Greece--Ireland-Spain--

All the Baltics in fact--N Korea

No majors--yet--but the ripple effect is in play--

The list gets bigger

Soon we'll be talking majors--

Yen/GBP/CAD/Yaun/EUR ?

Which will be sold down first--don't matter--

They all wait in line--this is genetic--

Their incestual relationship dooms them all,in the end---

Sun, 01/31/2010 - 18:50 | 212696 Gunther
Gunther's picture

To me the way suggested to play a Greek default does not make sense.
Gold options denominated in US$ plus currency conversion to Euro is possible but a short Euro/long US$ should bring the same result with appropriate leverage.
In case things spiral out of control after a possible Greek default something without counterparty-risk  seems a way better bet. Farmland, canned food, gold and for yanks guns and ammo come to mind.

Sun, 01/31/2010 - 19:10 | 212705 Anonymous
Anonymous's picture

As investment returns come back, gold will go down.

It doesnt carry well in a positive investment climate.


Sun, 01/31/2010 - 21:09 | 212764 Anonymous
Anonymous's picture

like from 04-08 ? drivel

Sun, 01/31/2010 - 23:34 | 212851 hack3434
hack3434's picture

Lol I remember when flipping houses was cool and everybody and their cousin had a realtor license. Invest! Invest!!! 

Sun, 01/31/2010 - 19:19 | 212709 Anonymous
Anonymous's picture

So BoA - via Zero – wants us to:

1. Remind ourselves and contemplate for a moment, in silence, on how the USD and gold are alternatives.

2. Greece muddling through to the other side, so that the EMU does not implode, is somehow USD positive.

3. If Greece on the other hand explodes, EMU implodes (and therefore USD gains over the EUR, which rates such an event as USD positive), well - if such be the case - then gold will surely surpass the USD.

3. BoA then sees how EM CBs - in their view - see gold as one of a “few viable alternatives” to the USD, again?

4. Hence, BoA, via Zero, concludes, that further rise in the price of the Greek »sovereign CDS« (over the Califlowernia one), though LT EUR negative, should nevertheless support the PoG (& let’s leave the USD out of this one).

5. Then, let us remember that EM CBs see gold as one of a “few viable alternatives” to the USD, again.

6. Despite that, the EM CBs will – nevertheless - find out that they have to hold more gold because the gold is not in fact an alternative neither to the EUR not the USD but they will find no more gold available, at such point, to “go around”.

7. So, to summarize: “To you, you E(M)U based targets - the gold options market continues to price in appreciation, together with the CNY and the JPY, the call skews in gold have become less pronounced, that is, OTM calls are no longer as rich as they used to be when compared to ATM calls ( = an end of a rip-off). Join our “sovereign CDS” spread pumping game and enter these gold calls so that, in the end, you too just like EM CBs, will find no more gold available to “go a round”. The last fool.

If such is the talent in banking then surely, I am excused for the length of this post. Same - as for talent - goes for both posters, that rated the above pile of bollocks with 5 stars.

Sun, 01/31/2010 - 19:22 | 212713 Anonymous
Anonymous's picture

112 tons = approx 3.5 mil ounces and $1,200 an ounce = roughly $4 billion unless my math is wrong of course.

Their debt is 300b Euros?


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