BITCOIN GREECE NEW CURRENCY ?????/ excerpt/ Why Isn't Greek Crisis Sending Gold Soaring?
Things are getting more than just tumultuous in Greece. They're getting downright scary.
Following raids on Greek pension funds in April, the Greek government centralized all of the cash it could muster citing “an extremely urgent and unforeseen need.”
Then, yesterday, 1,000 Greek bank branches chanced a stampede in order to open their doors to the country's retirees. Pension payouts were rationed and disbursals were limited according to last name.
Bloomberg aptly cited it as “a day of fresh indignities for the people of Greece.” Indignities, indeed.
Working hard your whole life in order to secure a pseudo-predictable and stable future. Then, bam! You're no longer entitled to what you earned. Just like that.
Bloomberg reports:
While Greek retirees receive a fraction of what they’re due, European officials resume efforts to prevent the economy from cratering after more than five years of crisis-fighting. Finance ministers weigh a new aid bid from Prime Minister Alexis Tsipras and European Central Bank policy makers discuss whether to maintain their emergency lifeline.
“People are just completely fed up,” said Andrea Montanino, a former IMF executive board member who now heads the global economics program at the Atlantic Council in Washington.
…
On the third day of capital controls, a few dozen pensioners lined up by 7 a.m. at a central Athens branch of the National Bank of Greece, an hour before opening time. They were to receive a maximum of 120 euros ($133), compared with the average monthly payment of about 600 euros. Many left with nothing after the manager said only those with last names starting with the letters A through K would get paid.
“Not only will I have to queue for hours at the bank in the hope of getting 120 euros, but I’ll have a two-hour round trip,” said Dimitris Danaos, 77, a retired local government worker who was making the bus journey from his home outside the Greek capital to the suburb of Glyfada. “And I fear that this situation won’t be over anytime soon.”
The Agence France-Presse chimed in on the chaos from the pensioners' perspective. One retiree (who asked not to be named) lamented, “I worked for 50 years on the sea and now I am the beggar for 120 euros … I took out 120 euros — but I have no money for medication for my wife, who had an operation and is ill.”
country's government is now signaling it may be willing to accept terms of a new bailout package a day after Greece failed to pay nearly $2 billion for loan payments.
What a lot of our readers are wondering now is this: why isn't the crisis in Greece sending gold soaring?
Although a political crisis will occasionally give gold a solid bump, the primary reason investors seek safe havens like gold is fear of currency crisis on a global scale.
Conversely, Bitcoin is a good alternative for political crises.
But in crises like the ongoing Greek debacle, deflation tends to show up when things really spiral out of control. Generally speaking, gold does tend to fall in a deflationary environment vs. one of egregious inflation (in which gold definitely does rise).
Why Gold's Still Going to Rise, Though
Yesterday, gold-related stocks retreated as the precious metal itself was also trading in the negative — approaching a near four-week low level.
The dollar is keeping pressure on gold as investors anticipate a Fed rate hike. But I wouldn't bank on the dollar managing to keep gold suppressed for long.
In the not-so-distant future looms an ominous looking currency crisis on the horizon. Investopedia formally describes a currency crisis as follows:
