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goldminingXpert (29.65)

The Euro is Toast

Recs

15

March 04, 2009 – Comments (13) | RELATED TICKERS: OMG

I've been saying this for a little while now, but here's some further evidence found from this article. I'll quote the best parts here, but I recommend the whole piece.

On the 11th February the Daily Telegraph’s Brussels correspondent Bruno Waterfield wrote an article under the header: “European banks may need £16.3 trillion bail out, EC document warns.”

and

“European Commission officials have estimated that “impaired assets” may amount to 44pc of EU bank balance sheets.

I don't know where one would come up with 16.3 trilion euros (20 trillion dollars). And 44 percent of all assets are bad! Wow! I mean, just wow! One thing I do know--the dollar index will be back over 100 soon as the european economies slowly sink back into the Atlantic. The one thing the gold bugs/America bears have been missing is that the rest of the world (bar Canada) are in much worse shape than we are. We may be going down--but the rest of the world is just about out.

13 Comments – Post Your Own

#1) On March 04, 2009 at 12:43 PM, JakilaTheHun (99.93) wrote:

The one thing the gold bugs/America bears have been missing is that the rest of the world

More accurately, this is the thing the reactionary anti-gold crowd has been missing out on. Demand for gold isn't coming from the US.  It's coming from Russia, India, and Europe.  Currency collapses tend to lead people towards hard assets, particularly gold. 

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#2) On March 04, 2009 at 1:05 PM, jesusfreakinco (29.09) wrote:

Good find.  EUR is toast indeed.  We are ALL screwed if this hapens.

Gold will rise even if the USD strengthens because of the panic caused around the world into hard assets.  No worries...

JFC

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#3) On March 04, 2009 at 1:07 PM, kdakota630 (29.87) wrote:

"...the rest of the world (bar Canada) are in much worse shape than we are."

Yay, Canada!  We're getting hit just like everywhere else in the world, but you're right, not as severely.

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#4) On March 04, 2009 at 1:13 PM, BigFatBEAR (29.31) wrote:

What, you don't have an $20 trillion sitting around in your account?

Psh. Probably cuz you trade options. You poor, options-trading college student. Once you get out of college and stop eating ramen, your income always skyrockets. Just like home prices. Duh.

Erm, I mean, nice find. This could be bad indeed.

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#5) On March 04, 2009 at 1:27 PM, oversea (< 20) wrote:

TheHuney,

Sorry to contradict you, but India is not buying gold at the moment even if it's wedding season (its currency dipped). There was a paper about this on kitko.com (the site for Au, Ag, Pa and Pd). Russia isn't buying gold either not only because it's a gold producer, but also because the rouble has gone to pot. In Europe only a few of us can afford it at the moment, jewellery sales are down by 20-25%. Switzerland is now officially in recession, the shares there are tumbling down and soon, I'm afraid, the Swiss franc (about which the Swiss themselves are very very sceptical nowaday) will follow. I do agree with jfk, if the euro collapses we all will be in a bloody mess. 

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#6) On March 04, 2009 at 3:11 PM, SideShowMel0329 (50.46) wrote:

TheHuney 

If someone buys gold just because "Currency collapses tend to lead people towards hard assets, particularly gold", then it sounds like they need to get their investing priorities straight. That sounds like a purely speculative move to me, playing off of other people's speculations.

Gold demand has fallen in this recession but prices are near decade highs. Just doesn't make sense.

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#7) On March 04, 2009 at 5:04 PM, JakilaTheHun (99.93) wrote:

Gold demand has fallen in this recession but prices are near decade highs. Just doesn't make sense.

Anyone who thinks demand for gold has fallen is living in a fantasy world.  Visit Russia and ask people there if they'd like to have more gold.  Prices are rising because demand for gold is rising and it's not done yet.  The short-term pullback will reverse at some point.

I'm not buying into gold because there are better commodities to buy into right now (copper, platinum, palladium, and more) --- but gold's trend over the next year should be upwards.

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#8) On March 04, 2009 at 6:54 PM, goldminingXpert (29.65) wrote:

http://www.research.gold.org/supply_demand/

Demand for its normal uses, you know, industrial use, dentistry, and jewelry are all down significantly. Jewelry demand dropped 11%. However, demand for "bar hoarding" rose sharply. I'm going to bet on the Indians and not the bar hoarders getting this one right.

Anyway, shame on you all for going off topic. Anybody want to defend the Euro?

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#9) On March 05, 2009 at 4:49 AM, TheGarcipian (32.89) wrote:

GMX, how soon do you expect gold to resume its northernly march? Looks to me that the SlowStochastics and other oscillators are still pointing down for gold for the next few days to maybe a week...

Thanks,
--Gar Report this comment
#10) On March 05, 2009 at 9:07 AM, oversea (< 20) wrote:

GMX,

sorry if I digressed a bit, but I tried to inform the people here that at the moment gold's future isn't that rosy.

All main currencies are heading down, just a few minor currencies are not. But this because they are supported by some temporary favourable situation (e.g. Norway). I strongly doubt the euro will sink. I've heard this tale too many times to believe it again. While some month ago we were trying to get rid of our US dollars, now there's less this attitude. A few days ago I bought some dollars in order to buy some US stocks and my financial advisor didn'faint. It seems that they think that we're heading toward a 1/1 exchange rate. My personal opinon, but I'm not at all an expert on this subject, is that this is quite reasonable. The non euro countries are struggling to keep their currencies afloat (GB, DK are 2 good examples), so I believe that they'll end up joining the euro. In Switzerland they have the feeling their currency is being slowly strangled by the enlarging euro area and that sooner or later they'll have to abandon their franc.

 

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#11) On March 08, 2009 at 7:00 AM, JakilaTheHun (99.93) wrote:

Anyway, shame on you all for going off topic. Anybody want to defend the Euro?

You're the one that brought it up, kiddo.  

I'm not sure why I would want to defend the Euro.  The Euro's weakness is part of the reason gold prices keep going upwards.  

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#12) On March 09, 2009 at 10:15 PM, FleaBagger (28.21) wrote:

Hate to contradict you (having almost learned my lesson from ACAS), but gold is not so much off topic, Ian. I would like to know how gold could conceivably stay cheap when Euros and dollars are both being printed by the trillions every month. Also, someone pointed out that roubles are not exactly scarce either.

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#13) On March 09, 2009 at 10:16 PM, FleaBagger (28.21) wrote:

By the way, Ian, what are your thoughts on the Yen (FXY)?

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