The Skinny On Greece And What It Means To Gold

Jim Sinclair's MineSet ^ | 03/03/10 | Jim Sinclair

[TigerLikesRooster]

The Skinny On Greece And What It Means To Gold

Posted: Mar 03 2010 By: Jim Sinclair

Dear CIGAs,

Greece will fail and be rescued is all that is discussed in the financial world. Here is the real skinny:

1. Greece getting bailed out means QE (printing of money) to infinity. That means gold would rise from here to $1650 by January of 2011, or as Martin Armstrong said, by June of 2011. The dollar would fall. Equities and commodities would rise.

2. Greece getting flushed means that would enrich the CDS OTC derivative tool. Immediately the next target currencies will be attacked by this tool. Currencies will fall like dominoes. At first the dollar will strengthen, equities will fall and gold will go lower. However, soon the recognition will come that a disaster has occurred that is more serious than the Lehman flushing. Confidence in currencies will fall everywhere. Gold will then rise not to $1650 by the same time in 2011 but to $5000 and perhaps beyond.

Either way both paved the road to a single virtual reserve currency and a single Central Bank (IMF) of Central Banks.

If Greece is bailed out it will take longer for the establishment of the single virtual reserve currency. If Greece is flushed it will happen so fast you will lose your breathe.

Either way I see gold as the only reliable fundamentally correct safe harbor. Gold will play a part at a very high price with the single virtual reserve currency in order to keep gold from being a competitor with it.

[TigerLikesRooster]

P!

[lookout88]

Ok, what about silver?

[DManA]

If Greece defaults the Euro would collapse and the Dollar would RISE compared to the Euro. Where would the priced of gold to? God knows.

[TexasRepublic]

“Ok, what about silver?”

I think the price of silver and other tangible assets will track upward if gold prices get too crazy. As governments print more and more unbacked funny money, people will lose confidence in the ephemeral and shift into physical assets, be it land, gold, antiques, etc. There used to be a historic ratio of values between gold and silver, but that ended decades ago.

[razorback-bert]

My prediction, Goldman Sucks gets richer.

[Bean Counter]

I think talk of a bailout for Greece is premature at best, and by no means a done deal no matter what the speculation. German taxpayers are not keen on the idea of coughing up their tax dollars, so that Greek Union members can continue to draw 15 months salary for 1 year’s “work”; among other things.

German citizens did not take kindly to being called Nazis by Greek Communists recently, either.

If there is no Freek bailout then default is inevitable and many of these same cards will just collapse sooner.

[Dick Bachert]

This story states the proper way to contrast the “dollar’ to gold.

When we hear that gold (or silver) is so much an ounce, we are being given a ratio — almost always the case with the media friends of paper money — precisely opposite of how it SHOULD be expressed.

At the moment, gold is NOT, for example, $1,100. an ounce, rather, the “dollar” has been reduced to a value of 1/1,100th of an ounce of gold. If the “dollar” is inflated to 1/6,300th of an ounce of gold, folks would get a more meaningful picture of what the politicians and the Fed have done to the currency.
Another interesting stat is that before the vote-buying politicians and masters of the universe at the Fed pulled us off a precious metals standard back in the day, the dollar was equal to 1/35th of an ounce of gold. And it has been calculated that the “dollar” of today is equivalent to less than 1 cent when measured against the dollar of 1913 or so BEFORE the Fed and the beloved INCOME TAX.

Sadly, it will ever be thus and it seems we must relearn those painful lessons every few generations.

In case some of you hadn’t noticed, class is now in session.

[ASOC]

Excellent points, and everyone will get schooled - there will be no place to hide. The olderly will take the biggest hit and AARP, Gray Panthers, etc can lobby their collective asses off and it will still mean nothing.

I saw first-hand what happened in Russia (CIS) after the ruble collapsed. Not pretty.....

[cowtowney]

good post. The dollar is going down, more than gold is going up.

[Buckeye McFrog]

We take the currency
and throw away
Intrinsic Solvency
Belongs to yesterday

Our leaders haven’t left
Two coins in the jar
Get out the feathers and tar
Be much worse off than you are

Greece is the word
(is the word, is the word)
It’s got debt with no ceiling

Greece is the place
Sent things tumbling in motion
And Greece gives a very bad feeling

Greece is the word
is the word, is the word...

(Apologies to Frankie Valley....)

[GOPJ]

If Greece defaults the Euro would collapse and the Dollar would RISE compared to the Euro.

You're right - there would be a flight to safety - and that would be us.

But it won't hold.

When California goes under it'll bring down the rest of the country. We'll be printing greenbacks faster than Europe's printing the Euro. Well, if the Euro survives....