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Eurozone Failure Could Send Shockwaves Around World Akin to Soviet Union

Tyler Durden's picture




 

From GoldCore

Eurozone Failure Could Send Shockwaves Around World Akin to Soviet Union

Gold is trading at USD 1,770.10, EUR 1,299.50, GBP 1,110.30, CHF 1,599.20, JPY 137,360 and CNY 11,200 per ounce. 

Gold’s London AM fix this morning was USD 1,766.00, GBP 1,109.09, and EUR 1,299.01 per ounce.

Yesterday's AM fix was USD 1,780.00, GBP 1,112.50, and EUR 1,300.41 per ounce.


Cross Currency Rates

Gold is 0.3% lower in US dollars and 0.5% lower in euros. Gold again
experienced weakness due to volatility and weakness in global stock
markets. However, this weakness is likely to be temporary again and
growing fears over the stability of Italy and the euro zone will support
safe haven gold.

Sharp falls in equities and commodities may have again forced some
investors to sell profitable gold positions to cover losses elsewhere
particularly in stocks which fell sharply in the US and Asia but have
stabilized in Europe.

Gold fell 0.8% in dollar terms yesterday but was higher in most currencies especially the euro.

The escalating crisis has prompted EC President Jose Manuel Barroso
to issue a stern warning of the dangers of splitting the zone. EU
sources told Reuters that French and German officials had held
discussions on just such a move. 

Merkel has called for changes in EU treaties and French President
Nicolas Sarkozy advocated a two-speed Europe in which euro zone
countries accelerate and deepen integration while an expanding group
outside the currency bloc stays more loosely connected -- a signal that
some members may have to quit the euro.

The failure of the Eurozone and the European monetary union looks
increasingly likely. This has incredible political, economic and
monetary implications for the world and could lead to shockwaves akin to
or surpassing that seen after the collapse of the Soviet Union. 

Given the scale of the crisis, we continue to amazed at the lack of animal spirits in the gold market – both from media coverage and from public participation. 

The majority have no idea of the ramifications of these momentous
geopolitical developments. The public knows the developments are
negative but most are resigned to their fate and many are like deer in
the headlights failing to join the dots and realize the ramifications
for their investments, savings and financial wellbeing. 

While demand in Asia has fallen from the very strong levels seen
recently - demand continues and Chinese New Year should see Chinese
demand pick up again in the coming weeks.

Western investment demand continues as seen in increasing allocations to the SPDR trust.

Holdings of the SPDR Gold Trust added 3.025 tonnes from a day earlier
to 1,267.153 tonnes by November 9, the highest since late August. The
ETF saw an inflow of nearly 24 tonnes so far this month, after an
11.6-tonne gain in October and a fall of more than 30 tonnes in the
previous two months, showing reviving interest in gold from investors.

As we have said for some time ETF buyers are primarily long term
diversifiers in nature and not speculative ‘hot’ money likely to flee
the gold market on signs of weakness. Much of the ETF buying is from
institutions including pension funds who are diversifying their
portfolios with very small allocations to the gold trust.

Bullion dealers in western markets continue to see demand but demand
is nowhere near the levels seen at the height of the Lehman crisis or
even towards the end of gold’s sharp rise to over $1,900/oz in August.

The public is nowhere near the gold market and the majority of people
in the western world could not tell you the price of gold today – let
alone how to buy it. The mainstream, non financial specialist, media
continues to cover gold sporadically at best. 

Price falls tend to be headline news rather than price gains.

Much of the buying we are seeing is from existing precious metal
buyers choosing to sell existing precious metal type investments such as
ETFs and digital gold in order to own physical bullion. 

Given the significant counter party risk seen in the world, as
graphically illustrated by MF Global, more buyers are choosing to take
delivery or opting for personal allocated accounts with legal title to
the bullion which is in their name 

This position is understandable given massive counter party risk due
to the risk of corporate, banking and national bankruptcies. 

For breaking news and commentary on financial markets and gold, follow us on Twitter.

SILVER 
Silver is trading at $33.91/oz, €24.91/oz and £21.25/oz 

PLATINUM GROUP METALS 
Platinum is trading at $1,623.20/oz, palladium at $643.50/oz and rhodium at $1,525/oz. 

NEWS
(Reuters)
U.S. gold falls 2 percent as Italy fear spooks markets

(Bloomberg)
Gold Drops a Third Day as Worsening European Crisis Stokes Dollar Demand

(Reuters) 
Italy at breaking point; fears grow of euro zone split

(Reuters)
Exclusive: French, Germans explore idea of core euro zone

COMMENTARY
(Zero Hedge)
Game Over? Reuters Says Germany, France Exploring Idea Of Core Euro Zone, End Of Existing Structure

(Gonzalo Lira)
Inflation, Hyperinflation and Real Estate

(Christian Science Monitor)
Printing Money Won't Solve a Global Depression

(King World News)
Nigel Farage - Where is Europe’s Gold?

(Financial Times)  
Financial Times Deutschland joins hunt for Germany's gold

 

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Thu, 11/10/2011 - 10:08 | 1865582 GeneMarchbanks
GeneMarchbanks's picture

Lira is crazy

For those who read his newest he is still beating the hyperinflation nonsense to death. Hugh Hendry is clutching his head....

Thu, 11/10/2011 - 21:08 | 1868442 bruinjoe93
bruinjoe93's picture

Why are you reading his work if you think he is crazy?

Thu, 11/10/2011 - 09:59 | 1865583 Azannoth
Azannoth's picture

"Eurozone Failure Could Send Shockwaves Around World Akin to Soviet Union" - What an excelent comparison

Thu, 11/10/2011 - 10:07 | 1865622 Spirit Of Truth
Spirit Of Truth's picture

The potential financial impact is far more negative: http://thespiritoftruth.blogspot.com/2011/11/crash-potential.html

Thu, 11/10/2011 - 10:36 | 1865777 SteveNYC
SteveNYC's picture

I would vouch the comparison does not do it justice. The Eurozone is a much, much larger economy than the USSR ever was/will be. Could be real ugly. However, Ben has not played his hand yet. Don't think the Eurozone is going to go down without Ben being involved in a "rescue" attempt first. Time for US citizens/residents to prepare for a real shafting.....

Thu, 11/10/2011 - 11:00 | 1865897 DosZap
DosZap's picture

Azannoth

"Eurozone Failure Could Send Shockwaves Around World Akin to Soviet Union" - What an excelent comparison

 

This will mak the SU break up look like a first date of a 14yr old.

Thu, 11/10/2011 - 11:31 | 1866019 s2man
s2man's picture

Cash was king when the USSR broke up.  You could walk up to the border and buy a tank from the unpaid soldiers.

 

Thu, 11/10/2011 - 10:00 | 1865586 fonzanoon
fonzanoon's picture

Eh....

Thu, 11/10/2011 - 10:01 | 1865587 Ethics Gradient
Ethics Gradient's picture

Failure "Akin to Soviet Union" indeed?. I never knew a time when it was so difficult to buy cabbage. I should get to the shops quick.

Thu, 11/10/2011 - 10:03 | 1865602 Schmuck Raker
Schmuck Raker's picture

The Soviet Union collapsed?

Thu, 11/10/2011 - 10:05 | 1865615 Azannoth
Azannoth's picture

it Evolved

Thu, 11/10/2011 - 10:50 | 1865833 11b40
11b40's picture

It's transitory.

Thu, 11/10/2011 - 10:57 | 1865877 Snidley Whipsnae
Snidley Whipsnae's picture

Russia is conducting transitory discussions with Germany regarding a new joint transitory currency... tentative name for the new currency 'Rubadusche'.

Thu, 11/10/2011 - 10:03 | 1865603 SheepDog-One
SheepDog-One's picture

'Increasingly likely' like it raised from 99.999% to 99.9999.9% ?

Thu, 11/10/2011 - 10:03 | 1865604 Peter K
Peter K's picture

European Soviet Socialist Republic is about to have a Gorbachov moment. What we are witnessing is the fall of Socialism western sect. It's that simple:)

Thu, 11/10/2011 - 10:04 | 1865606 NEOSERF
NEOSERF's picture

How long is Germany going to allow the ECB to buy crap on their hard-earned dime?  Really, the high dourt has said no, the people say no and yet the ECB apparently just ignors them...

Thu, 11/10/2011 - 10:05 | 1865610 BlueStreet
BlueStreet's picture

Yet here we are with what looks to be another day of misguided optimism.  

 

 

Thu, 11/10/2011 - 10:12 | 1865652 HD
HD's picture

 Can't keep a good ponzi down apparently....

Thu, 11/10/2011 - 10:05 | 1865614 TheSilverJournal
TheSilverJournal's picture

Print, print, print. Have PHYSICAL CASH on hand just in case they're not printing fast enough and bank deposits become unredeemable. And of course, stack silver. 

Thu, 11/10/2011 - 10:07 | 1865623 bernorange
bernorange's picture

Spread the word about HR 1098.  We need to get a groundswell of support for it like we did for Auditing the Fed (a partial success so far).

Thu, 11/10/2011 - 11:31 | 1866016 augmister
augmister's picture

+1   Important to have cash on hand... deposit to the Bank of Beauty Rest and the Bank of Sealy !!!!!

Thu, 11/10/2011 - 11:34 | 1866038 s2man
s2man's picture

Yep, cash on hand to pick up great deals as asset prices tank.  And silver on hand with which to barter when no one will take the cash anymore.

Long beans, bullets, bandages and bouillon.

Thu, 11/10/2011 - 10:07 | 1865624 undercover brother
undercover brother's picture

it's the right thing to do so it absolutely won't happen. 

Thu, 11/10/2011 - 10:09 | 1865626 Christoph830
Christoph830's picture

Tyler, could you keep quiet about gold for just a few months while I accumulate more dry powder? I don't want the public catching on just yet given your recent successes moving markets. Thanks!

Thu, 11/10/2011 - 10:08 | 1865630 Zgangsta
Zgangsta's picture

What's a Soviet Union?

Thu, 11/10/2011 - 10:24 | 1865715 i-dog
i-dog's picture

It's a failed experiment in applied socialism (the main thing that was applied was force) that was copied to the European Union.

Strangely enough, the geniuses in Rome and Brussels copied it to Western Europe at the same time (1957) that it was first recognised as having irretrievably failed in Russia!! Go figure....

Thu, 11/10/2011 - 10:08 | 1865635 0cz
0cz's picture

I am beginning to think that this economic collapse isn't something that is going to happen anytime soon.  Every exchange on the planet is front run and computationally directed to the fucking max.  Italy can pull a $6.8 billion euro bond purchase out of its ass at the drop of a pin.  Bank of America is the most disfunctional and corrupt bank on the planet but it is now propped up by so much fiat injection, by just a few players, that it is impossible for it to break the $6 line of support anymore.  European banks can lose 20% equity in a matter of seconds and be fine. 

20 years ago we would have called these events catastrophic but today we are told to call them 'market moves'. 

http://www.youtube.com/watch?v=4iHW4kYn0kY&feature=related

Thu, 11/10/2011 - 10:17 | 1865673 aerojet
aerojet's picture

Yes, it is all smoke and mirrors. Bank of America should have failed in 2008--it's a zombie, like all the other zombies.  It needs a bullet to the head.

Thu, 11/10/2011 - 10:18 | 1865680 SheepDog-One
SheepDog-One's picture

'Before Christmas'- Jerusalem Post.

Thu, 11/10/2011 - 10:11 | 1865649 Tic tock
Tic tock's picture

It's not entriely a Eurozone failure, more like a retrenchment of the  Corrupt Eurocrats to the safe-hands of their Rich nations.

Thu, 11/10/2011 - 10:15 | 1865665 ivars
ivars's picture

One more supporting prediction chart for deflation in the USA in end of 2011-beginning of 2012 and all the scenarios that follows:

1) Economy in recession from q1 2012 ( increased cash hoarding=reduction of money velocity main reason)

2) Stocks sharply down, most commodities down

3) Gold, silver stable until more money -MUCH more is pressed in

4) USDx up

Supporting charts

This prediction is valid for up to q4 2012 (with differing details visible in other charts)

Thu, 11/10/2011 - 12:01 | 1866177 augmister
augmister's picture

You #3 is wrong.  ALL commodities will fall with the stock market...overall initial DEFLATION.   We either do a double bottom on AU back to 1530-1570 or crash through that....

No worries!  Have your truck ready to back up to the loading dock for the last change to get your shiny before it goes to the moon.

Keep yer powder dry.

Thu, 11/10/2011 - 10:15 | 1865666 aerojet
aerojet's picture

Soviets, bitchez!

 

Or is the "bitchez" thing played alaready?

 

Gold could be heading down due to margin calls--all commodities are way overpriced due to speculators running rampant with printed money, desperately trying to save their firms.  It will never work--didn't work for Lehman or Bear, won't work now, either.

 

Thu, 11/10/2011 - 10:17 | 1865671 Irish66
Irish66's picture

Something new is about to pop up of the bad kind

Thu, 11/10/2011 - 10:20 | 1865694 SheepDog-One
SheepDog-One's picture

Yep just as soon as everyone thinks they got it all figured out and their chips on the right bet on the table, here comes the rug pull out.

Thu, 11/10/2011 - 11:58 | 1865851 IrritableBowels
IrritableBowels's picture

The CNBC douchebags seem off (more than usual), don't they?  A few days ago, they'd be waving their arms around and dancing and stuff and praising the market gods.

http://www.youtube.com/watch?v=1DsFMJQHbMs

 

Thu, 11/10/2011 - 12:03 | 1866195 augmister
augmister's picture

Boggyman?  Poltergeist?  Nuclear attack?  Economic collapse?  Famine?  Mass Civil disobedience?  Death and destruction?  Kardashians naked on TV?

Thu, 11/10/2011 - 10:21 | 1865697 El Yunque
El Yunque's picture

What's todays spread on *DCB? Does the market climb higher on the cliff today for a maximum effect on the oncoming joyous holiday season about to meet said cat?

*Dead Cat Bounce.

"...stocks were mostly up until they were down..."

in other news, The Koch brothers are opening a new paper shredding facility in Greece; seems Euros are the softest quilted ass-wipe yet.

Long - Euro Quilted.

Thu, 11/10/2011 - 10:21 | 1865700 Bansters-in-my-...
Bansters-in-my- feces's picture

Oh my....

The Rothschilds pet project is failing.

Too Fucking Bad.

...............Fuck You's Rothschilds,and your followers...........................

Thu, 11/10/2011 - 10:22 | 1865706 NEOSERF
NEOSERF's picture

Gold and silver would decline in the failure as well, margin hikes and margin calls would require selling...every large selloff lately for equities have included gold which is how you can tell there is real fear in the markets...

Thu, 11/10/2011 - 12:05 | 1866202 augmister
augmister's picture

+1 !   Mass shaking out of the weak hands and the time to back up the truck to the AU loading dock!

Keep yer powder dry!

Thu, 11/10/2011 - 10:27 | 1865736 Shizzmoney
Shizzmoney's picture

I fistbump every morning and wake up that I have no 401K/Pension plan to worry about.

The look on the face of the old people who work in my office who do, however, is both sad AND hysterical.

Thu, 11/10/2011 - 12:08 | 1866214 augmister
augmister's picture

401K not a problem if you can take a loan out and buy PMs and take physical control.  However, the average Joe doesn't get it, hell, the pundits don't even get it!

This is going to end real badly.  Massive Civil disobedience.  America will discover lead as a precious metal.

Thu, 11/10/2011 - 10:35 | 1865767 marcusfenix
marcusfenix's picture

so the ECB is going on a bond buying binge and claims printed sub 400,000... for now? looks like whoever called a 400 pt rally yesterday is going to  be right after all. I know once there was a real world where basic math and the laws of economic psychics once applied...but now I'm beginning to wonder just how long can this bullshit go on for?

has it come to the point where simply making shit up, news, rumors, stats, money (via printing, digital or "glitches") has completely replaced any sense of common sense? another day, another dead cat bounce, another opportunity for the 0.0001% to suck more of life out of the the rest of us, to take what so many already don't have.

another day when a child will be born into a world where there only future is to sling hash, sell goods made somewhere else or become a dependent of the superstate, and their only right will be that of a debt slave.

welcome to the New World Order...

Thu, 11/10/2011 - 10:35 | 1865769 ZapBranigan
ZapBranigan's picture

No one yet?  Ok, fine....

In Mother Russia, animal spirits default on you!

Thu, 11/10/2011 - 10:37 | 1865786 LawsofPhysics
LawsofPhysics's picture

Coming soon to all countries around the world.

Thu, 11/10/2011 - 10:39 | 1865790 Magnix
Magnix's picture

Whats going on? DOW's up 100 points!

Thu, 11/10/2011 - 10:54 | 1865853 tim73
tim73's picture

"The failure of the Eurozone and the European monetary union looks increasingly likely"

How many fucking times you yanks are going to repeat this crap like stupid parrots? 10 fucking years I have heard that shit...well, let's hear that shit for maybe another five years while we are at it before USA goes the way of USSR. Then you might even shut the fuck up.

Thu, 11/10/2011 - 12:42 | 1866330 gnomon
gnomon's picture

The European monetary union is DEAD already.  What we have seen recently is the kicking of the feet as the eyes glaze over.

Thu, 11/10/2011 - 10:54 | 1865861 Dr. Nancy
Dr. Nancy's picture

All that's happening is predictable, as there are 7 stages that every
major economy goes through. Those who know how it works profit & massive
wealth is transferred to them. Several months ago I learned this
information from a millionaire whose site I found & am sharing it with
everyone I know.
His free video
"How To Create Incredible Wealth in Today's Economic Crisis"
is at:
http://theelevationgroup.net/presentation/register.php?a_aid=160667&a_bid=290b868b&chan=y
Hope this info helps everyone as much as it has me.
Dr. Nancy

Thu, 11/10/2011 - 15:09 | 1867037 LongOfTooth
LongOfTooth's picture

piss off Dr. Nancy

 

Thu, 11/10/2011 - 10:57 | 1865875 dizzyfingers
dizzyfingers's picture

"The public knows the developments are
negative but most are resigned to their fate and many are like deer in
the headlights failing to join the dots and realize the ramifications
for their investments, savings and financial wellbeing"

 

When one has not been working,can't find work and can't pay the bills, do you really think that one can buy gold hedges when the price of bread and milk are going up everyday?

Thu, 11/10/2011 - 12:10 | 1866230 augmister
augmister's picture

Massive civil disobedience.  When the "Bread and Circus" ends, they will burn down the tent!

Thu, 11/10/2011 - 13:20 | 1866529 robertocarlos
robertocarlos's picture

I'm going to stock up on canned soup today. What a stupid world.

Thu, 11/10/2011 - 13:56 | 1866664 Fix It Again Timmy
Fix It Again Timmy's picture

"Financial Follies" - worldwide premier!  A dazzling display of stupidity and hubris,a cast of thousands, plays every day and coming soon to a neighborhood near you!  If you pay taxes, it's free, if you don't pay taxes, it's free, if you can fog a mirror, it's FREE...

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