If Greece's currency colaspes

If the government and it's currency fail in Greece, can those who control the silver market (and gold) do anything to stop the metals rise in value? Especially if Spain's economy and other European countries begin to falter. They held it back from $50 an ounce once, but can they do anything about a global crises once it occurs? Greece is teetering.

 

Log in or Sign up to hide this ad.

Who are "those who control the silver market"?

 

The Greeks use the Euro, their defaulting on their loans will not, by itself, cause the Euro to fail. It will cause further weakening of the Euro.

 

And quite possibly an increase in the USD value. ( currently at 76.25 now). It may be this factor that limits gold and silver( more so, in my opinion) increase more than the euro decrease. I am hoping that China did buy a lot of greek bonds a few months ago as they threatened ( trying to buy foreign influence), as that will affect them badly along with their internal inflation. If Greece defaults on their government bonds, they don't have to give anyone anything. People/countries who buy the bonds accept the interest rate as the risk factor. High interest, high risk.

The interesting thing today is that when financials look bad outside of the US, they don't run for PM, but for the USD. I hope that those who decried the fate of the USD, take notice. Just my opinion.

 

In other words, when other countries suffer financially, the US tends to benefit, and the price of goods drops.

I sure would like to see me some $2 gas again.

 

And $7 silver

 

I dunno about that low, maybe $10 silver. I'd be dumping hundreds every week into silver.

 

I guess that's true. At $10 I'd be broke and "all in" so $7 would just make it too low
But boy would I have some silver at those prices!

 

The price of gas is about 80% controlled by speculators on the futures market and has little to do with supply and/or demand.

 

Wouldn't speculators be part of the demand?

 

Does the tail wag the dog?

Perhaps, you intended to write "manipulators" verses "speculators."

Does the tail wag the dog?

The Manipulators stir up the speculators - JMHO.:foot-mouth:

 

I would be more concerned about the price and availability of Greek Olives.
The EURO issue in Greece is a done deal. It is a goner.
The new currency of Greece might revert back to goats, gold, and greek olives.
Personally, The three "G's" are a more stable choice.

 

Don't be so quick celebrate the fall of the Euro as being good for the $. It's come to light in the last few days, because of court orders for information, the US Federal Reserve has been providing 100s of billions of $ capital to European banks.

 

The whole issue with the bailouts of the PIIGS countries has highlighted a fundamental weakness of sharing a common currency across frontiers. It doesn't predicate the demise of the Euro, but it will take a big hit. If anything, metals will likely take a hit too - as the masses flock to the dollar temporarily - until something happens in the USA economy and they all run back to metals or the Euro.

 

I'm not sure that a crisis in the Eurozone would necessarily hold back gold prices. The dollar index doesn't measure increases and decreases in the absolute value of the dollar, only the relative value. So if the value of the dollar is declining 5% and the value of the Euro is declining 10%, the dollar index will rise. In the short run this may hurt gold prices, but in the longer term, gold prices will see through this.

 

Yes. [getting up on soapbox]. The crisis in the eurozone isn't ultimately an economic one. It is a political power struggle. The banks want people to sacrifice and suffer to avoid having to write down loan values, and many high ranking politicians side with the banks. My own personal opinion is that people should not be made to suffer for the sake of the banks. The risk of default is inherent in any lending process. In Iceland, the people voted multiple times to default on the debt rather than suffer a closure of schools and hospitals to save the bonuses of the London bankers. Now, Iceland's economy is growing again. This is a pure power struggle that bears watching. Eventually, the US will be faced with the same decision - default or perpetual destruction of our standard of living to preserve the profits of the banks by servicing a level of debt that can never be paid down. You are going to hear a lot of rhetoric about "American will never default" and horror stories about all sorts of dire consequences if the debt is not serviced. Everyone needs to watch and understand this and get beyond the superficial remarks about Greeks and others wanting something for nothing. This is an existential world struggle that will decide the fate of the world's middle class for the next 100 years - so be careful in how you take sides because the lives of your children and grandchildren are at stake. This may turn out to be the most important issue of the early 21st century. [getting off of soapbox to get some coffee ]

 

They would both decline against what? Currencies only "decline" in relation to each other. If you are postulating a decline, then against what currency? Yen? I think we know their problems. Yuan? Not fully convertible. Rupee? I wouldn't touch that with a ten foot pole. Ruble? Great if you want to bet on a corrupt pseudo-economy that will only ever rise with commodities. CDN and AUD is both too little to play in.

I am just saying with the Yen having problems, I do not see how the USD and Euro have to play off of each other in relative strength, meaning if someone is moving out of Euros the USD would benefit relatively.

Chris

 

But there are dire consequences. Destroying working capital for industries, (since the banks will have all reserves destroyed by a default and many would fail outright), would lead to massive business closures. This would cascade to a second round of failures in support industries. I would easily see 30-40% unemployment in a couple of years in the even of an outright US default, and banking failures so high that FDIC could not protect depositers, (and the US could not borrow and help the FDIC cover the losses).

I am not saying you are wrong Cloud, just that there IS no good outcome either way, and either way the middle class suffers from their politicians spending the countries wealth as they have already.

 

Decline against purchasing power, which is the measure of intrinsic value for a currency.

 

Your comment is exactly the type of rhetoric that I was writing about. The game is to throw out every conceivable horror to frighten people into accepting perpetual poverty to preserve the banks. But it didn't happen in Iceland. And there have been large and widespread bank failures in the US before in the 70s and 80s. The problem with what you write is rooted in the belief that the way things are is the only way they could possibly be. And it isn't true. The FDIC can easily cover all losses without borrowing by bringing back the US Note. And no, it will not be inflationary because the addition of money to the economy is offset by the subtraction of FRN denominated debt.

But it takes a new and open mindset to see the solution. Luckily for Iceland, the people there understood better than the people and economists in the US.