What would be the consequences of worse case senario: greece out of euro, default on payments/refuse debt payments. Theyd print their own money and start fresh, domestically thats would work well wouldn't it and they would be a cheap destination for tourists.
Accounting ledger -- fiat debt written off.. fiat debt reserve banks can fractionally reserve create will need to be wound back unless they can use some more fancy accounting.. As its just a ledger entry to create the "debt" in the first place .. its only going to be a book concern. Confidence of consumers may change in europe and worldwide.. this is what may effect the gold price.. as people weight up banks and debt, the contagion risk is that because the fiat game is all about confidence, with no confidence the value of fiat will crumble.. could be a financial 911 or worse.. the destruction of the current monetary hegemony or destruction of the global reserve bank strangle-hold on privately produced debt system. I am sure they have a contingency plan to usher an even more despicable system.. ie: IMF's GLOBAL SDR (special drawing rights) which is basically a global currency (basket) weighted by major world currencies.. China will ensure gold stays low whilst they continue to furiously stockpile.. and until they have diversified away from the US$ in a meaningful away and will allow it to crash by dumping the last of there holdings.. at the same time buying gold and lastly depegging from the US$ increasing the purchasing power of the average china man 2-3 fold overnight!
Probably there's some short-selling going on right now and it manages to keep gold so low. I'm surprised myself.
It used to be a cheap destination for tourists before the euro! The Dracma was worth little, and many years ago before Greece entered the "common market" it was even cheaper to visit! I know I used to go for dirt cheap holidays like aussies go to Bali. Greece has nothing but olives to sell and the common market must buy them, this led to an olive mountain so guess what? we all now drizzle olive oil over everything because we think its healthy or we are not quire sure why but all the celb chefs do lol we were all just conned into buying the useless olive mountain and still are lol
What surprises me is how expensive it still is. If you check the flights, the hotels, the boat trips... they're pretty much at the same levels. Normally, one would expect prices to dip.
UK Mint Seeing Europeans Rush To Buy Bullion European investors are increasing purchases of gold as Bloomberg reports, Greece's turmoil boosts the appeal for an alternative to the euro. Demand from Greek customers for Sovereign gold coins was double the five-month average in June, the U.K. Royal Mint said in an e-mailed statement.As one Frankfurt-based bullion dealer noted, "most of our common gold coins are sold out, when people learned that the Greek banks will be closed, they started to think that it may not be such a bad idea to have some money in gold." Emailed statement from UK Mint... "During June, we experienced twice the expected demand for Sovereign bullion coins from our customers based in Greece," accord. to e-mailed statment from U.K. Royal Mint. * * * As Bloomberg reports, CoinInvest.com, an online retailer, said sales on Saturday and Sunday were the highest since Cyprus limited cash withdrawals in 2013, driven by a jump in German, French and Greek buyers. Investors are searching for a safe haven after Greece imposed capital controls, closed banks and stopped selling gold coins to the public until at least July 6. German Chancellor Angela Merkel and French President Francois Hollande have signaled they've reached the limits of their ability to safeguard Greece, offering the government no further concessions to step back from the brink. "Most of our common gold coins are sold out," Daniel Marburger, a director of Frankfurt-based CoinInvest.com, said by phone. "When people learned that the Greek banks will be closed, they started to think that it may not be such a bad idea to have some money in gold." GoldCore, which buys and sells bullion, reported coin and bar demand increased "significantly" on Monday. Sales to U.K. and Ireland today are about three times the average level for the past three Mondays, according to an e-mailed statement from the Dublin-based firm. BullionVault, which operates the largest online physical gold trading platform, reported a jump in sales during the first half of this year, a sign of a broader increase. Customers globally added 1.4 metric tons of gold to their account, the biggest increase since 2012, the London-based company wrote in a press release. More clients want their gold stored in Switzerland, a country that isn't in the European Union, Adrian Ash, head of research at BullionVault, said by telephone. http://www.zerohedge.com/news/2015-...ite-uk-mint-seeing-europeans-rush-buy-bullion
If Greece defaults then prepare yourself for a bond market correction...... Understand that the bond market is at least 5 times bigger than all world stock markets combined. Now imagine the amount of borrowed money running short and long on this market. Mind boggling. Now imagine the carnage when the correction picks up steam and the rush for the exits begin. Now imagine the losses that will be incurred in a very short space of time. Expect an across the board panic. Everything will be sold off initially. Stocks, gold, oil, iron ore, wheat etc. But only one will remain strong initially. The mighty U.S. dollar. Only then, after the carnage will the real value be found.
Italy will be next and all 3 will be there much more quickly if euro credit dries up and banks have to write off losses. I think the immediate issue will be basically resolved though, albeit with more butthurt feelings on all sides. The deal won't solve anything though and we'll be back here before to long. I'm shocked that Greece is getting so much air time when what's happening in China. Everyone's looking at the run up and now reversal as healthy, but that doesn't account for the many many retail and institutional investors who got in late and are hurting badly. This is particularly important for australia, when the kids school tuition comes due and you need money one of the first thing to go will be the overseas investment property, if they're able to make a small profit now then they will all want to sell it at the first whiff of risk or personal necessity. If you've thought about buying a house in Sydney then you might want to get your finances in order, a buying opportunity might present itself soon.
Well gold isn't doing any better job at that that basically anything else denominated in $USD, including $USD themselves.
Probably nothing much with happen to the price of gold ... the other markets will likely be insulated by mechanisms ... it is a banker experiment to try force a country under their rule ...
Germany knows that if the Greek people vote "No" then the inevitable will occur. The democratic power of the people in the other Euro countries will also insist on a vote on austerity. The bond value of these countries will plummet in value if the people demand haircuts on debt. These bonds form the asset base of European banks and as such they will become insolvent in a very short space of time should the bond prices collapse. This is the doomsday scenario which at this point in time is unavoidable. Perhaps if the Germans send tanks into Athens to discourage the 'No' vote will this bond collapse be avoided....for the moment. There are no 'mechanisms' to protect against what is to come.
So if default occurs, what will happen to the price of gold in aud? Stock market crash! China is already 30 percent lower...Germany to follow...then France...then UK followed by USA and NZ.
There are an incredible amount of derivatives that will come into play in a default shakedown. This is the "fill your nappy" moment. A rapid movement in bond prices will create a rapid movement in currency markets which will put a lot of derivative positions deep in the red. The effect of this is the inevitable panic of positions being exited at losses simply to get out of any and all markets. This panic will sink all boats except one. The U.S. dollar will absolutely sparkle. The Euro will cop a flogging. The Aussie dollar will be toasted. This is what we have stacked for. This is the event that will turn the tide of gold and silver but prepare to see $10 and $900 before the rise.
No vote - UP (USD, core/AAA nation bonds) DOWN (Other major/minor currencies, stock markets, peripheral bonds, gold, silver, oil)
My wife did the right thing with our sons significant savings. Moved it to Singapore dollars and invested there a year ago. He is already 10% ahead on currency alone. Before long it will be over 20%.
