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Gold Firms as Dollar Fallsby Peter A. Grant
Apr 09, AM 
Gold is higher today, underpinned by a softer dollar and new record highs in the yellow metal versus the yen. The yen continues to slide against most currencies as the BoJ prepares to embark on the greatest monetary experiment in our time.Additionally, there are some rumblings that Greece may at some point resort to a Cyprus style bail-in and confiscate a portion of bank deposits. While seemingly only rumor at this point, it lends credence to speculation from several weeks ago that Cyprus would serve as a template for other distressed eurozone countries. Of course, why anyone in Greece would have euros in the bank at this point is beyond me. The Washington Post reported today that $100 bills are becoming a leading U.S. export. The dollars in circulation have soared in recent years as a result of Fed accommodations — although the Japanese are about to show us how its really done — and most of that expansion has come in the form of $100 bills. However, about two-thirds of those bills are ending up overseas, in paces like Cyprus and Greece. Specifically, in places like Greece and Cyprus, the goal is most likely to get wealth out of the euro and out of the banking system. This makes perfect sense as the Eurpean debt crisis persists, and in light of recent events in Cyprus. However, why anyone would breath easier after exchanging one piece of paper of another piece of paper isn't abundantly clear to me either. Gold has served as a reliable store of wealth for thousands of year. Gold knows no geographic or political boundaries. I'd pick gold over paper any day of the week; a sentiment echoed by Hayman Capital's Kyle Bass on BloombergTV today. 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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