You posted: "You clearly cannot see the forest despite the trees.
The European Central Bank (ECB) presumed the existence of uninsured accounts (i.e., 100,000 €) to reach its deal with the Cyprus government. The uninsured accounts were supposed bear all losses, preserving accounts below 100,000 €. If deposits in the uninsured accounts have vanished, all that is left to bear bank losses are the insured accounts (i.e.,"...
Yes, I see Clearly what you are not registering. In a true BULL MARKET scenario, all of these problems would have a good portion of the freshly printed $40 billion per month of Unlimited QE the world over, funneling into PM assets, sending their prices Up-Up-Up-Up-And-Up...you know, like is happening to the Dow Jones Industrial Average, and the many, many stocks that have rallied for the last two years the metals have either been moving sideways or backtracking. There are all kinds of small- and micro-cap stocks in the broad market, too, which are now rallying again this year, after being flushed last year. So, why can't the PMs, and the stocks of them, catch a bid and rejoin the hoopla???
When they ain't going up, let alone through the roof, as one would rationally think they Should be...the old adage is applicable, Don't Fight The Tape by making excuses! You see? METALS AREN'T MOVING AND I SEE THAT BOTH CLEARLY, AND PROBLEMATIC. And I shouldn't have to tell you why...though then again, maybe I do. Because, when things cannot go up when most of everything else is...guess what usually gets sold hard some more and again once the overbought market DOES go correcting? You got it! The languishing "precious metals" and their stocks, which the _gurus_ you guys keep listening to keep pumping and selling you down the river. THEY cannot seethe forest through the trees, because unfortunately they are not without the permabull bias. Whatcha gonna do, and Say, about this, ahem, "bull market" if things stagnate around present levels for the rest of the year?
also to you oopsie you should take a look outside your rose colored glass world
for bit coin look at these gains. I actually do not like bit coins but no doubt look at this.
alternative currencies are actually in demand.
the problem with silver though is the banksters have taken it to heart to destroy the perception of gold/silver as a currency.
but you know what? the world is salivating and demanding for a change of currency to something real. look below from 1 penny all the way to 71-91 dollars. wow right? but they can easily be hacked or phished as well.
the system is not complete.
there are other ways to steal money or destroy them though.
as well as encryption can all be decoded in time. code itself was quite interesting though.
money is only worth what goods and services it can be traded for after all.
but at any rate sorry OOPSIE we will continue to buy physical regardless of what you say or any bankster says.
physical resources is always going to be better than paper fakes.
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Unfortunately, Yahoo truncated the majority of my post. But I was at work and didn't have time to re-type what was deleted.
Anyway, it all boils down to this: It is becoming increasingly clear that the financial basis for the Euro is fundamentally flawed. Germany cannot (and will not) bail out England, France, Spain, Italy, and Portugal. The latter will not make any meaningful changes to their governmental spending until they absolutely have to. And therein lies the problem.
The banking system in the EU is heavily over-leveraged, and in the Southern periphery, hiding significant losses. Depositor accounts in Portugal, Spain, and Italy will have to be "taxed" to cover losses from bad loans. Cyprus is a prediction of things to come. But citizens in those nations will not wait to the fate of Cyprus to befall them. They will withdraw funds while they still can. If you can't see how that will benefit gold and silver, I can't help you.
So feel free to ride the market up a little longer, but when the correction comes - and it will come - the down trend will be brutal. There is nothing you can do to stop the situation in Europe. And it will affect the stock market in the United States.
Those who are currently recommending buying gold stocks due to the Cyprus situation are the same ones who were recommending buying last month when gold was at the same level, and at the beginning of the year when gold was higher, and a year ago when gold was higher.
We have no time for the “permabulls” who do not change their view on the market. Markets change and one’s outlook must be prepared to change as well. The graph below shows how gold has broken down in recent times and how it has failed to make a higher high since August 2011. This is a good example of markets changing, and we have therefore changed our stance to match, generating profits for our subscribers this year as opposed to those buying gold stocks who are losing money.
Gold has not rallied since the Fed announced rates were to be kept low until late 2014, and gold stocks have consistently underperformed for 7 years; without a major collapse in US employment data we see this as unlikely to change. Of the strategies that can be used to take advantage of the current market situation and the crisis in Cyprus, buying gold stocks is not one of them.
A Eurozone breakup may push gold prices higher, as some investors go to the yellow metal as a safe haven asset. However, if one wished to make money during such an event, they would do well to remember that gold prices fell during the global financial crisis, and therefore could do the same through a Eurozone breakup.
Europe falling apart in 2011 coincided with gold soaring to all time highs of over $1900, and because of this there is a school of thought that states gold will rise if Europe falls apart now. However, the key driver behind the 2011 rally was increased money printing from the Fed. The graphs below show the 2011 rally came following a collapse in US employment data, and the consequent Federal action. Therefore if the Fed prints money in response to a Eurozone meltdown, then it is possible that gold will rally; however, a lack of money printing in response will likely result in gold prices falling.
If there were a Eurozone meltdown it is possible that the Fed could respond, but with some kind of action that would not involve quantitative easing, such as Operation Twist in the past. Operation Twist had a relatively no positive effect on the gold price during its span, and therefore any similar operations would be unlikely to shift gold in either direction. This means that considerable monetary easing would be required by the Fed as a response to a Eurozone meltdown to trigger a rally in gold prices.
This entire scenario is based on a great many if’s, and given the current market situation we see its unfolding to be very unlikely. Gold stayed stagnant through the latest news surrounding Cyprus. Equities have not been sold off; in fact they are staying at all time highs with the S&P closing at over 1550! What we can glean from this is that the market believes any activity in Europe will not have a major effect on the markets.
Great article for you all, with contra point of view for consideration, from SK Options. Find the story online to view his fantastic charts.
Cyprus Crisis: Do Not Buy Gold Stocks
Crisis in Cyprus has lead investors and speculators re-considering how they allocate their portfolios. Despite Cyprus only representing a minute 0.2% of Eurozone GDP, the possibility that fear of a meltdown may spread across the markets does mean that one should consider the possible downside risk. If the market believes that other Eurozone nations could go the same route as Cyprus, then it is likely that we would see a selloff in the market.
To minimize the downside risk of this current market situation there are a variety of trades that one can make; however, buying gold stocks should not be included.
The argument for buying gold stocks as protection against the downside risk is along the lines of this, “Cyprus will have a contagion effect and send Eurozone back into crisis, thus increasing the demand for safe haven assets such as gold. This would push gold prices higher, and therefore gold mining companies will make greater profits in the future. Higher profits mean that the stock price of these companies should rise”.
We do not believe that the Eurozone will follow Cyprus into crisis, given that the S&P closed on highs of 1556.89 on Friday and the market appears to be shrugging off problems in Europe. However, for the sake of argument let us therefore assume it does.
In such a situation, the first thought of an investor is not “I must own gold mining companies, they are the best place for my money now that the Eurozone is in crisis”. In fact, this is likely not in the top 100 thoughts of an investor in that kind of situation. If a Eurozone crisis does follow Cyprus and there is a Eurozone break up, then it will be risk off 2008 style and every stock holding will be dumped.
That's the _logic_ which makes CONTRARIAN viewpoint thinkers into the unloved but frequent winners. You believe so much, if not Everything, I say is "absurd," charlie, however take a step back and ask yourself who has been correct and consistently during this length period of PMs/PM equities' underperformance.
I can show you many small-/micro-cap stocks whose charts resembled PM stocks--falling for two years and getting dumped at the end of last year--only those have seen a rejuvance and coming back from the dead this year while the PM sector still is seeing weakness. Talk to me about why these equities aren't seeing BILLIONS of readily available investment capital snapping up their shares at what so many gurus are Screaming are "dirt cheap valuations?"