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Wake up gold and silver! Your prices should be falling.

October 28, 2011 – Wake up gold and silver! Your prices should be falling. Haven’t you heard that the worst is over? Aren’t you paying attention to Wall Street?

Just three days ago the networks were all bubbly with the news that Europe was saved and our own GDP was signaling the end to the threat of another recession. How you can have another while still in the first is beside the point.

But wait. Today investors have already backed off to reconsider. Of course a little more thought beforehand would have been prudent considering that EU “agreement” was the 14th such in under two years, none of which has led to one iota of improvement. This one, however, is a real corker.

It doesn’t take much thought to see behind this curtain. Accord was reached in the eleventh hour not through scholarly discourse but through strong-arm coercion. European nations were told to take a bath on Greek debt to the tune of half of everything they hold or the mob would drive Greece into default and they’d lose it all. Some choice.

Greece was save from default by what can be described only as default. But because “voluntary” acceptance of a 50% write-off constitutes a settlement between the parties, it technically cannot be called a default. Everybody is happy, except for the investors holding that Greek paper whose investment got cut in half overnight and who cannot claim against their default insurance. But what’s new?

Fitch Ratings isn’t buying it, and the others are sure to follow. The service says the debt exchange clearly constitutes default and it will act accordingly to lower Greece’s rating. Fitch also noted that the agreement did nothing to diminish the risk of future downgrades for other European nations.

China isn’t getting onboard either, dashing the hopes of many that China was about to step in with gobs of desperately needed cash. To the contrary, Chinese Vice Finance Minister Zhu Guangyao announced that China “must wait until [the plan’s] structure is extremely clear. And moreover, this investment must be decided on after serious, technical discussions.”

It would seem that the gold and silver markets have been wide awake and paying rapt attention all along.

Shannon King

Senior Staff Writer – GoldSilver.org

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