Euro Crisis and Contagion Almost Certain In 2017 Warns McWilliams

A euro crisis and contagion is almost certain in 2017, Irish economist and writer David McWilliams has warned:

“It is almost certain that there will be another euro crisis in 2017. The last time we had a euro crisis, the focus of attention was Greece; today the vortex is Italy.

Italy is not Greece. Italy is the third-largest economy in the Eurozone. Italy is the second-largest manufacturing nation in the EU after Germany. Italy is the largest debtor in Europe.

The third-largest Italian bank is irredeemably bankrupt. Italy has no government and the people who are likely to win the next election want to take Italy out of the euro and replace the euro with their own currency, the lira.

 

Gold in EUR (YTD 2016)

These are the facts.

Our Finance Minister has said there is no problem in the Eurozone. I really don’t know what planet he is living on.

Unfortunately for the EU, if Greece was a tricky issue to deal with, Italy is — in economic terms — a massive Greece …”  See article here

Despite the recent sell off in gold prices, gold remains 12% higher in euro terms in 2016 – from €974/oz to €1,092/oz.

Gold is 10% higher in U.S. dollars and 30% higher in pounds.

The bout of euro strength we have seen in recent months is unsustainable and will in time give way to the euro weakening against gold. Gold will again hedge and protect investors and savers in the EU from euro weakness as it did during the financial crisis.

The dollar has had a massive rally and looks overvalued versus most currencies and indeed gold. U.S. assets have increasingly poor fundamentals and both U.S. stocks and bonds look vulnerable to sharp corrections and new bear markets.

The panacea of massive bailouts, bail-ins and massive currency printing by the ECB as announced last Thursday, may or may not prove effective at containing the crisis in 2017. However, investors with a more long term horizon are diversifying and looking to the inflation protecting and systemic hedging  qualities of gold.

The most effective hedging instrument and safe haven asset remains gold bullion. This is only the case if investors own allocated and segregated gold and silver coins and bars in the safest vaults, in the safest jurisdictions in the world.

 

Gold and Silver Bullion – News and Commentary

Gold falls to 10-mth lows on Fed rate hike bets (Reuters.com)

Saudis Signal Deeper Cuts After Deal With Non-OPEC Countries (Bloomberg.com)

Trump offers Goldman Sachs President NEC Director Position (CNBC.com)

Donald Trump says CIA charge Russia influenced election is ‘ridiculous’ (TheGuardian.com)

House prices in prime central London fall by nearly 5%, says Knight Frank (IBTimes.co.uk)

Chinese Buyers Find Bargains in Gold (WSJ.com)

Gold Turnaround King Follows Biggest Deal Yet With Plan for More (Bloomberg.com)

What’s The Catch With This Turkish Gold Plan? (DailyReckoning.co.uk)

Inflation-hit Venezuela to pull largest bill from circulation (Reuters.com)

Gold “primed for a $150-$200 rally” (Investing.com)

Gold Prices (LBMA AM)

12 Dec: USD 1,154.40, GBP 916.82 & EUR 1,089.41 per ounce
09 Dec: USD 1,168.90, GBP 927.64 & EUR 1,100.75 per ounce
08 Dec: USD 1,174.75, GBP 925.47 & EUR 1,088.64 per ounce
07 Dec: USD 1,171.25, GBP 929.62 & EUR 1,092.19 per ounce
06 Dec: USD 1,171.15, GBP 918.18 & EUR 1,086.94 per ounce
05 Dec: USD 1,164.90, GBP 915.84 & EUR 1,095.36 per ounce
02 Dec: USD 1,171.65, GBP 929.00 & EUR 1,100.88 per ounce

Silver Prices (LBMA)

12 Dec: USD 16.86, GBP 13.34 & EUR 15.90 per ounce
09 Dec: USD 16.95, GBP 13.45 & EUR 16.03 per ounce
08 Dec: USD 17.13, GBP 13.50 & EUR 15.88 per ounce
07 Dec: USD 16.77, GBP 13.32 & EUR 15.64 per ounce
06 Dec: USD 16.79, GBP 13.17 & EUR 15.63 per ounce
05 Dec: USD 16.62, GBP 13.05 & EUR 15.54 per ounce
02 Dec: USD 16.35, GBP 12.95 & EUR 15.36 per ounce


Recent Market Updates

– ECB ‘Bazooka’ Reloaded Until At Least December 2017 – Euro Gold Rises 1%; 13% YTD
– UK £6 Billion Worse Off After Multi Billion Pound Gold “Accounting Error”
– Buy Silver – May Replace Gold As Money In India
– Shariah Gold Standard Approved for $2 Trillion Islamic Finance Market
– Potential “Systemic Crisis In Eurozone” After Italy Votes No, Renzi Resigns
– Gold and Silver Will Protect From Coming Financial Crash – Rickards
– RBS Fail Bank of England Stress Test
– Peak Silver – Supply Deficits Mean Higher Prices
– Bail In Risk – €4 Trillion Banking System In Italy Poses Contagion Risk as Referendum Looms
– Gold Down 13.5% In 13 Days – Trump Bearish For Gold?
– War On Cash Just Got Real – India and Citibank In Australia
– Russia Gold Buying In October Is Biggest Monthly Allocation Since 1998
– Stocks, Bonds, Pension Funds “Will Be Wiped Out…” – Rickards

Mark O'Byrne

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