My guess.. silver down gold up On second thoughts.. both will probably head down like GFC, will gold head back up after everybody changes their jocks and g-bangers? who knows
so can I just ask, there may be 2 scenarios: 1. QE3 -> gold up, silver up 2. US default -> gold up? That means either case gold is still heading up?
US default would be a result of not increasing the debt ceiling, not as a result of whether QE3 is implemented or not.
If the US defaults? WHEN the US defaults The real question is how the US will choose to default? Will they refuse to raise the debt ceiling? fail to pay their bills and stop answering calls from unknown numbers? Or will they just print some more? I sure as hell don't see the point in discussing or even measuring PM's in US dollars. Much more relevant to discuss how different forms of US default will affect the strength of the Aussie and kiwi dollar and our personal ability to obtain physical precious metals.
If US defaults - countries lose trust in US dollar, no more loans, US dollar collapses, new world reserve currency or currencies emerge? or maybe a completely different system emerges backed by gold - whatever happens it would probably start a world depression until things sorted out. If it did happen it could be the Swiss franc backed by gold that becomes the reserve curency. I really don''t think they will alow it to default yet, I think this is a fear tactic to raise the debt ceiling and for QE3. The next two weeks are critical. Going on latest trends looks like gold will remain (despite BB opinion) the leading store of wealth. I can't see the gold price crashing from this position but there is more chance of it continuing to rise and taking silver with it. I thought it interesting the graph shown on Erstebanks latest report on gold (this July) which showed how the reserve currencies had changes over time (don't forget it was the British pound for a long time) and that another change (from the US dollar to another currency) was due. If the US loses its reserve currency status it would be catastrophic for the US as it has been printing money for a long time to buy resources produced in other countries!
I really doubt that America will or intends to actually default on her US$14 trillion+ of US Treasuries. What I AM certain about is that inflation is being deliberately generated via Ben Bernanke and his printing press, to devalue the USD to the extent that the repayments wil be easy. The devaluation will be in the range of about 80%, and from there the REAL inflation will start. Germany and Zimbabwe etc will confirm that hyperinflation is fairly easy to start, and damned hard to stop. Bernanke and his crew are not stupid, they know the end result of all that printing. OC
I heard on the radio this morning that there are rumblings from China about downgrading the US from AAA to AA (the US owe China a truckload - technical term - of cash). They are saying that there needs to be a resolution soon RE raising the debt ceiling because of the uncertainty and possibility of default etc etc. Also heard that Fortescue have done a deal to trade using RMB as the currency - the radio told me (must be true) that it was the first such deal by a mining company to trade in that currency Very interesting month ahead in terms of where the globe is heading.
Inflation would mean everything priced in US dollars goes up including oil and gold, rest of worlds currencies have to keep readjusting but end result is lack of confidence in the US dollar as the reserve currency - it would then have to be replaced with terrible consequences for the US! I think other countries are already thinking of alternatives. Maybe there will never be one reserve currency again? - I also heard about Fortesque using the RMB - this could be the start of others doing the same thing!
