part two/ 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.
A currency crisis is brought on by a decline in the value of a country's currency. This decline in value negatively affects an economy by creating instabilities in exchange rates, meaning that one unit of the currency no longer buys as much as it used to in another. To simplify the matter, we can say that crises develop as an interaction between investor expectations and what those expectations cause to happen.
As the stability of a given economy erodes, investors flee the country — maybe not physically, but financially. This is known as capital flight. Investopedia elaborates:
Once investors have sold their domestic-currency denominated investments, they convert those investments into foreign currency. This causes the exchange rate to get even worse, resulting in a run on the currency, which can then make it nearly impossible for the country to finance its capital spending.
Predicting when a country will run into a currency crisis involves the analysis of a diverse and complex set of variables. There are a couple of common factors linking the more recent crises:
•The countries borrowed heavily (current account deficits)
•Currency values increased rapidly
•Uncertainty over the government's actions made investors jittery
Home is Where the Crisis Is
Sound familiar? To me, this sounds a lot like the situation in the U.S. Massive debt, a strong dollar, and a whole lot of uncertainty regarding the role of the feds, etc.
The fact of the matter is that the crisis in Greece is setting a disconcerting precedent and igniting a great deal of fear amongst all pensioners in the western world.
Corrupt, plutocratic, crony-capitalism doesn't work. The system will eventually implode. Gold will eventually rise — as it always does in times of true currency crises.
Like I told you last week, it's important to keep your eye on China in the wake of currency wars, crises, and crashes.
Greece won't send gold soaring on its own (although the yellow metal is trading quite erratically this morning on polling information on the Greek referendum, and also the interpretation of today’s jobs report)...
However, there's a perfect storm brewing when you factor in China's influence over global gold prices (it's playing a bigger role here than you may think), Fed ambiguity regarding interest rates, Russia's bulk-bullion-buying spree, and the usual chaotic-ness of the latest currency war that's been going on for the better half of a decade now.
When the purchasing power of money goes down as economies grow weak, gold goes up. It's as simple as that. So be aware of what's happening, currency wise, around the world right now and invest accordingly.
AI
