Blog Archives

Greece Out of Funds by Month End – Default and Drachma Imminent?

Greece Out of Funds by Month End – Default and Drachma Imminent?

- Greek government to withhold IMF payments according to the FT
- Prime Minister Tsipras denies preparing for default according to Reuters
- Government funds to run out by end of month
- Default would likely lead to “Grexit” and return to drachma
- EU may not withstand uncertainty surrounding break-up of monetary union
- Concern could trigger derivatives crisis and ‘Lehman moment’
- Like frogs in a pot of water that is very slowly coming to the boil

1,000 Greek Drachma Note

The Financial Times, citing unsourced “people briefed on the radical leftist government’s thinking” has made the claim that the Tsipras government in Athens has “has decided to withhold E2.5 billion of payments due to the International Monetary Fund in May and June if no agreement is struck”.

The Greek government was quick to deny the claim. “Greece … is not preparing for any debt default and the same goes for its lenders. Negotiations are proceeding swiftly towards a mutually beneficial solution,” read a statement from the Prime Minister’s office.

The Greek government is rapidly exhausting its funding  to pay salaries and pensions with no funding from its lenders having been released since July. Another “end of the road” deadline looms – this time the Eurogroup meeting on April 24th. (more…)

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Gold Surges – Fed Loses “Patience” and Signals Loose Monetary Policies to Continue

Gold Surges – Fed Loses “Patience” and Signals Loose Monetary Policies to Continue

- Gold rose over 2% – Fed signals ultra loose monetary policies to continue
- Fed dampens expectation of a rate hike in June
- Yellen no longer “patient” – notes weakness in recent US economic data
- Fed knows that fragile, debt laden U.S. economy cannot handle higher rates
- Despite recent dollar strength, dollar vulnerable in long term
- Sole reserve currency status threatened in currency wars

Gold rose sharply following yesterday’s Fed announcement in which it was indicated that the Fed are unlikely to raise rates in June – although the possibility was not ruled out – due to the poorer economic data that has been emerging this year.

‘Helicopter Janet’

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Currency Wars Deepen – IMF Concedes End to Dollar Hegemony

Currency Wars Deepen – IMF Concedes End to Dollar Hegemony

- Dollar has declined as reserve currency over past decade from 70% of global reserves to 61%
- Chinese yuan is growing in stature as international currency
- IMF deputy director calls for de-dollarization in emerging markets
- Many countries have begun de-dollarizing
- BRICS development bank – rivaling the IMF and World Bank – is now operational

Currency wars and the growing trend away from dollar dominance in international finance, particularly in emerging markets, was highlighted in an interesting CNBC article this morning entitled “Is the Dollar Losing its Clout Among EMs?

goldcore_bloomberg_chart2_9-03-15

It refers to the deliberate and stated policy of “de-dollarisation” around the world, the decline in the use of the dollar in international trade and as a reserve currency and the emergence of the new BRICS bank. (more…)

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Greece Buys Gold Sovereigns as New Greek Drachmas Unveiled

Greece Buys Gold Sovereigns as New Greek Drachmas Unveiled

- Greece warns may default on IMF loan next week

- Greek bank runs continue and deposits flee

- German Bundestag votes for bailout extension

- Syriza agree to a bailout extension of four months, in return for concessions yet to be approved by the EU

- Questions over Syriza negotiating a weak deal despite it’s strong position

- Greece and EU buying time to arrange orderly “Grexit”?

- Greece has printing presses poised to print newly designed Greek Drachmas

- Greeks buying gold bullion

The Euro Working Group discussed Greece’s imminent funding problems yesterday amid mounting concern about how the country will meet its massive obligations.

Minister of State for Coordinating Government Operations Alekos Flambouraris suggested yesterday that Greece might delay payment to the IMF if it cannot find the necessary money.
Greece is due to pay the IMF 1.6 billion euros next month but the Greek Minister said that Athens might ask to delay this payment for two months.

Proposed New Greek Drachmas

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Gold Demand Explodes as Volatility and Fear Stalk Market

Gold Demand Explodes as Volatility and Fear Stalk Market

Although the extent to which the surprise move by the Swiss National Bank last week has damaged financial institutions will not be apparent until the end of the month, it is already clear that enormous damage has been wreaked on many businesses exposed to the foreign exchange markets.

On Thursday the SNB unpegged its currency from the euro without warning. The peg was put in place three years ago during the height of the euro crisis to prevent the Swiss franc from rising too much relative to its EU neighbours and damaging its exports.

Swiss Franc images by MadGeographer

The shock move caused the Swiss franc to rally almost 30% against the euro and 28% against the dollar. To maintain the peg, the SNB had been forced to accumulate around €500 billion leaving it very vulnerable to a euro devaluation.

It would seem that the move was not coordinated with the ECB or the Fed and may be endemic of a new low phase in global central bank communications. Many times throughout the financial crisis central banks have coordinated efforts to stabilise market volatility and to manage stimulus programs in concert. (more…)

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Swiss ‘Yes’ and ‘No’ Gold Initiative Campaigns Compete at Launches in Bern

Swiss ‘Yes’ and ‘No’ Gold Initiative Campaigns Compete at Launches in Bern


Contents
– Introduction
– ‘Yes’ Campaign Launch
– Paper Decays, Gold Holds Its Value
– ‘No’ Campaign Launch – Alphabet Soup
– Unsaleable Gold Like an Unusable Fire Extinguisher?
– Swiss Electorate 5.2 Million
– Double Majority Including Cantons
– Referendas by the Dozen
– Sometimes There are Shock Results

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Prepare for Global Gold Confiscation and Orwell’s 1984, Warns Rickards

Prepare for Global Gold Confiscation and Orwell’s 1984, Warns Rickards

We do not believe Rickard’s prognostications for a “New World Order” will come to pass. “How would that happen? The G-20 meetings struggle to agree on a final communique. How could they agree something like that?” asks Arabian Money in their review of Rickards’ article. We do see potential for a major crisis in the financial and monetary system along the lines that Rickards describes. And with this in mind we emphasise once again the prudence of storing gold and silver in fully segregated and fully allocated accounts in ultra-secure vaults in the safest jurisdictions in the world. (more…)

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U.S. and UK Test Big Bank Collapse – Risk Of Bail-ins

It is now the case that in the event of bank failure, your deposits could be confiscated. Let’s be crystal clear: The EU, UK, the U.S., Canada, Australia and New Zealand all have plans for bail-ins in the event of banks and other large financial institutions getting into difficulty.

Are your deposits safe?
Are you prepared for Bail-Ins?
Special Report on Bail-ins Here

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Ebola and Global Recession Risks Send Stocks Sliding

All the focus has rightly been on the medical implications of the disease and the tragic human consequences. So far, there has been little attention on the financial and economic consequences of a pandemic.
Global economic growth remains weak and vulnerable and the global financial system remains very fragile. The ebola virus has the potential to be the straw that breaks the proverbial camel’s back.
The outbreak and spread of Ebola is a worrying development and should remind people and companies, the world over, to be aware of the risks and be prepared.

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Currency Wars Deepen – Russia, Kazakhstan Buy Very Large 30 Tons Of Gold In August

Kazakhstan now has the world’s 23rd largest holdings, just behind the Philippines which has 194.4 tonnes of gold reserves.

Currency Wars: Bye, Bye Petrodollar – Buy, Buy Gold

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Cry for Argentina: Fiscal Mismanagement, Odious Debt or Pillage?

Argentina has now taken the US to The Hague for blocking the country’s 2005 settlement with the bulk of its creditors. The issue underscores the need for an international mechanism for nations to go bankrupt. Better yet would be a sustainable global monetary scheme that avoids the need for sovereign bankruptcy.

Argentina was the richest country in Latin America before decades of neoliberal and IMF-imposed economic policies drowned it in debt. A severe crisis in 2001 plunged it into the largest sovereign debt default in history. In 2005, it renegotiated its debt with most of its creditors at a 70% “haircut.” But the opportunist “vulture funds,” which had bought Argentine debt at distressed prices, held out for 100 cents on the dollar. (more…)

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US Equity Markets are Overbought, Gold Looking Solid

In our chart  you can see the RMI is at an ear splitting 90.567.

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