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<p>[QUOTE=&quot;Smitty, post: 1347805, member: 35044&quot;]One thing to watch very closely is how much cash (record levels) the European banks are currently parking at the ECB. The same thing happened in the US around the Lehman period which froze up liquidity. Gold at that time took a steep dive (look at the charts for late 2008). If banks keep parking their money instead of lending to companies, individuals and each other, the ECB will crank up the printing presses. Since US banks are counter-parties to much of the European banks&#039; trades, it wouldn&#039;t surprise me if the Fed cranks up theirs too. That&#039;s what this whole &quot;dollar swap&quot; that Bernanke did in November was about. He basically bailed out the European banks to save US banks. No reason to think he wouldn&#039;t do it again. The mindset at the Fed is that if the banks go, everything goes. They&#039;re not going to let that happen. Once it&#039;s clear that the printing presses are going into overdrive, gold will rally.</p><p><br /></p><p>Considering all this, I bought Barrick Gold last week. I bought stock instead of bullion for a couple of reasons. <ol> <li>The miners are undervalued compared to physical bullion.</li> <li>If the Europeans won&#039;t put cash into their own economy, there&#039;s a good chance that cash will flow to US equities.</li> <li>Greece faces large debt payments in March, which could lead to default or finally being kicked out of the EU. This panic would cause more outflow of funds ... likely to the US.</li> <li>The US is rigging the numbers to make our economy look like it&#039;s improving. I think most people are buying it, and perception is reality. Another reason for the stock market to go up.</li> </ol><p>So Barrick would get the boost of a rising gold price, and the added boost of rising equities.</p><p><br /></p><p>But I could be completely wrong. <img src="styles/default/xenforo/clear.png" class="mceSmilieSprite mceSmilie1" alt=":)" unselectable="on" unselectable="on" />[/QUOTE]</p><p><br /></p>

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