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The Greek Tragedy is Far from Overby Peter A. Grant
Nov 27, AM 
Gold slipped in early trade on Tuesday to new lows for the week, but remains confined to the high end of last Friday's range. The yellow metal was weighed modestly by a firmer dollar, which benefited from some better than expected U. S. economic data.Consumer confidence for November came in higher than expected at 73.7. The Case-Shiller home price index posted another modest rise in September, as did the FHFA home price index. The Richmond Fed index rebounded to +9 in Nov, versus -7 in Oct. The dollar index found support ahead of 80.00 yesterday and is retracing some of last week's losses, but upticks remain lackluster. While Greece seems to have secured yet another new deal, designed to get them back on a sustainable fiscal path, the market seems to have its doubts. The euro is under pressure today, having failed to sustain recent probes above 1.3000. After setting new four-week highs earlier in the session, the single currency is now trading below yesterday's low. One of the concessions was that Greece new has an extra two years to achieve a debt/GDP ratio of 124% by 2020, rather than the previously agreed to 120%. However, whether your talking debt ratios of 120% or 124%, Greece remains in the midst of a devastating depression, which raises serious doubt about whether any such goal is attainable. After all, previous troika projections over the past three years on Greek debt and recovery have been colossal misses. I'm not sure why anyone would believe that their latest calculations are any more reliable than the previous one's. Gavyn Davies of Fulcrum Asset Management suggests in an FT op-ed that the latest deal is based "on the optimistic assumptions that the primary budget surplus can be held indefinitely at 4.5 per cent of GDP, while nominal GDP growth rebounds to more than 4 per cent per annum." That is indeed pretty optimistic. Davies goes on to suggest the deal provides "the outline of an eventual, larger deal, based on official debt forgiveness." One thing seems certain, the ongoing Greek tragedy is far from over. NEWSLETTER SIGN-UP Opinions expressed in commentary on the USAGOLD.com website do not constitute an offer to buy or sell, or the solicitation of an offer to buy or sell any precious metals product, nor should they be viewed in any way as investment advice or advice to buy, sell or hold. USAGOLD, Inc. recommends the purchase of physical precious metals for asset preservation purposes, not speculation. Utilization of these opinions for speculative purposes is neither suggested nor advised. Commentary is strictly for educational purposes, and as such USAGOLD does not warrant or guarantee the accuracy, timeliness or completeness of the information found here.
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Tuesday November 27
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