LIVE Gold Prices $  | E-Mail Subscriptions | Update GoldSeek | GoldSeek Radio 

Commentary : Gold Review : Markets : News Wire : Quotes : Silver : Stocks - Main Page 

 GoldSeek.com >> News >> Story  Disclaimer 
 
Latest Headlines

GoldSeek.com to Launch New Website
By: GoldSeek.com

Is Gold Price Action Warning Of Imminent Monetary Collapse Part 2?
By: Hubert Moolman

Gold and Silver Are Just Getting Started
By: Frank Holmes, US Funds

Silver Makes High Wave Candle at Target – Here’s What to Expect…
By: Clive Maund

Gold Blows Through Upside Resistance - The Chase Is On
By: Avi Gilburt

U.S. Mint To Reduce Gold & Silver Eagle Production Over The Next 12-18 Months
By: Steve St. Angelo, SRSrocco Report

Gold's sharp rise throws Financial Times into an erroneous sulk
By: Chris Powell, GATA

Precious Metals Update Video: Gold's unusual strength
By: Ira Epstein

Asian Metals Market Update: July-29-2020
By: Chintan Karnani, Insignia Consultants

Gold's rise is a 'mystery' because journalism always fails to pursue it
By: Chris Powell, GATA

 
Search

GoldSeek Web

 
$125bn Spanish bank bailout sets gold up for $2,000 and silver $60 this autumn

By: Peter Cooper, Arabian Money


-- Posted Sunday, 10 June 2012 | | Disqus

Eurozone finance ministers panicked this weekend and agreed to a preemptive announcement of a $125 billion bailout for the Spanish banks, bringing the grand total for bank bailouts to $600 billion when Ireland, Portugal and Greece are added.

Money printing on this scale has only ever been good for precious metal prices by historical precedent. The bank bailouts are an example of money creation at the source with banks able to lend more against this new capital injection and sterilising bad debts.

Precious metal prices

It sets gold up to power above the $1,923 all-time high of last September and hit $2,000 an ounce this fall, while silver will as usual outperform to the upside and cross the 1980 all-time high of $50 and go to $60. This is only what we heard in the Dubai Old Souk earlier this year (click here).

Of course the eurozone politicians have been panicked by the upcoming Greek election on June 17th to do something now rather than wait for the contagion to hit Spain. It remains to be seen whether preempting market fears has actually put them ahead of the curve.

Nobody really knows the likely course of events after the Greek election. Watching the TV programs with politicians lashing out at each other smacks more of anarchy than a stable democracy. But many have begun to question the praticalilty of leaving the euro.

The single currency was not designed for countries to come and go. Liquid assets in euros have already fled Greece but going back to an independent currency would still mean huge losses for the rich, although it would also create a buying opportunity.

Perhaps then the eurozone will bite the bullet and accept even bigger losses on Greek debt, and create money to save its banking system as an alternative. The sudden cave in over Spain at the weekend certaintly suggests that is the way the wind is blowing.

Monetary inflation

More and more paper money in the system, more and more sovereign debt, it can only end badly and most certainly with much higher inflation levels. Inflation in China jumped last month as the world’s third largest economic bloc slowed down.

Investors who want to beat inflation are left with fewer and fewer options. Central banks cannot print gold, they can only buy it themselves as an inflation hedge and help to push up the price. Silver is a tiny market that will follow and outperform gold as a sister monetary metal.

There are few win-win scenarios for global investors in these markets, expect more and more investors to jump on this train. That is why prices are going higher.


-- Posted Sunday, 10 June 2012 | Digg This Article | Source: GoldSeek.com

comments powered by Disqus


About Peter Cooper:
Oxford University educated financial journalist Peter Cooper found himself made redundant by Emap plc in London in the mid-1990s and decided to rebuild his career in Dubai as launch editor of the pioneering magazine Gulf Business. He returned briefly to London in 1999 to complete his first book, a history of the Bovis construction group.

Then in 2000 he went back to Dubai to become an Internet entrepreneur, just as the dot-com market crashed. But he stumbled across the opportunity to become a partner in www.ameinfo.com, which later became the Middle East's leading English language business news website.

Over the course of the next seven years he had a ringside seat as editor-in-chief writing about the remarkable transformation of Dubai into a global business and financial hub city. At the same time www.ameinfo.com prospered and was sold in 2006 to Emap plc for $27 million, completing the career circle back to where it began a decade earlier.

He remains a lively commentator and columnist as a freelance journalist based in Dubai and travels extensively each summer with his wife Svetlana. His financial blog www.arabianmoney.net is attracting increasing attention with its focus on investment in gold and silver as a means of prospering during a time of great consumer price inflation and asset price deflation.

Order my book online from this link




 



Increase Text SizeDecrease Text SizeE-mail Link of Current PagePrinter Friendly PageReturn to GoldSeek.com

 news.goldseek.com >> Story

E-mail Page  | Print  | Disclaimer 


© 1995 - 2019



GoldSeek.com Supports Kiva.org

© GoldSeek.com, Gold Seek LLC

The content on this site is protected by U.S. and international copyright laws and is the property of GoldSeek.com and/or the providers of the content under license. By "content" we mean any information, mode of expression, or other materials and services found on GoldSeek.com. This includes editorials, news, our writings, graphics, and any and all other features found on the site. Please contact us for any further information.

Live GoldSeek Visitor Map | Disclaimer


Map

The views contained here may not represent the views of GoldSeek.com, Gold Seek LLC, its affiliates or advertisers. GoldSeek.com, Gold Seek LLC makes no representation, warranty or guarantee as to the accuracy or completeness of the information (including news, editorials, prices, statistics, analyses and the like) provided through its service. Any copying, reproduction and/or redistribution of any of the documents, data, content or materials contained on or within this website, without the express written consent of GoldSeek.com, Gold Seek LLC, is strictly prohibited. In no event shall GoldSeek.com, Gold Seek LLC or its affiliates be liable to any person for any decision made or action taken in reliance upon the information provided herein.