What effect will Greece situation have on PMs if no agreement reached?

[jim4silver]

What effect will Greece situation have on PM's if no agreement reached?

Wondering what short term effect the Greece situation might have on gold and silver IF they cannot reach an agreement? My guess is that it might be mildly stimulative short term but who knows. If they do get some agreement I don't see it hurting PM's so probably will be neutral on an agreement.

I am watching the situation because I think it will affect US stocks short term either way depending on how it is resolved. I am out of my ETN positions now waiting for some market guidance.

This really is interesting because Greece elected someone who promised to stand up against the austerity, etc, so politically he can't budge or his voters will turn on him. And the Euro gang (per what the pundits report) are saying no new concessions since Greece didn't live up to what they already agreed to do in the old deal. (This is my basic understanding I am sure it is more complex).

So one side must blink. If either side were to break from their current positions they will lose face big time. Can't wait to see how it ends. One interesting note is that I heard a pundit on sat radio talking about how Russia or China might move in to offer $$$ to Greece so maybe they can set up bases there, etc. Even heard maybe the US will offer $$$$$ to Greece. In any event, I doubt that there will be a final NO deal. Some party will cough up the dough and not make the Greeks accept any new austerity, etc., then the can will be kicked down the road as all countries now do with debt, etc.

Just my opinion.

Jim

 

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[Mackaydon]

At the eurozone meeting today, Greece will say it is ready to cooperate on 70 percent of its bailout obligations but wants to overhaul the remaining 30 percent -- which it would replace with the 10-step plan.The plan consists of several measures including lower budget surplus targets and cutting debt through a swap plan to replace its obligations under the current deal.
Meanwhile, Greek Foreign Minister Nikos Kotzias is expected in Moscow on February 11 at the invitation of his Russian counterpart, Sergei Lavrov.The antiausterity government in Athens has been open about wanting to forge closer links with Russia. Greece's Defense Minister has said Greece could turn to the United States, Russia, or China if it fails to reach a new debt agreement with the eurozone.
Stay tuned.......
How this may affect PM prices is beyond me.
Don.....

 

[Mackaydon]

Here's what Reuter's reported yesterday:

Bullion got a boost as nervousness over Greece potentially withdrawing from the euro and escalating conflict in Ukraine sapped risk appetite and hurt stocks. "With ongoing concerns surrounding Greece and a potential default, as well as the Ukraine crisis, gold should find support and hold above the 55-day moving average at $1,225 and 100 day moving average at $1,217 in the near term," said Jason Cerisola,a metals dealer at MKS Group. The probability of Greece leaving the eurozone has risen several notches as Prime Minister Alexis Tsipras has taken an increasingly hard line over government debt. Tsipras has insisted that his country would not extend its reform-linked bailout. European Commission President Jean-Claude Juncker warned Greece not to expect the eurozone to bow to Tsipras' demands in a growing confrontation that spooked financial markets and prompted U.S. and Canadian pleas for calm and compromise. "It is hard to conceive of gold selling off substantially given the prevailing uncertainty and considering the very real possibility that Greece could now default on its debts," said INTL FCStone analyst Edward Meir.
Don.....

 

[Mackaydon]

Formal negotiations between Greece and eurozone finance ministers on Wednesday failed to reach an agreement or a framework for further talks on Greece's debt burden. The group meets again on Monday; if no agreement is reached before February 28, when Greece's bailout program expires, the European Central Bank is expected to cut off funds to the country. In that event, what do you think will happen with the price of PMs? I'd guess they will rise.
Don....

 

[jim4silver]

This is starting to get interesting. Supposedly they need to have a deal agreed to by tomorrow to give the other Euro nations time to approve it by Feb 28. I am guessing they will reach some agreement, but kind of hope they don't just to see what happens.

I think PM's would go up and stocks down if they really did fail to resolve this and Greece runs out of cash and defaults or whatever it is will happen in such a circumstance. But again, I think it's more likely cooler heads will prevail and the situation will be worked out.

Just my opinion.

Jim

 

[Marchas45]

Yea but Jim this is the Year of The Goat and they just love EATING PAPER Check out Bill Holters piece.
The Year OF The Goat? | A Trusted Resource For Gold, Silver, Platinum, and Bullion News

 

[Mackaydon]

The current leftist Greek government got into office on a platform of no more austerity; instead, they wanted to renegotiate their prior austerity commitments.They got general push back on that suggestion from other countries, especially Germany. The Greeks then agreed to accept 70% of the original agreements and renegotiate the remaining 30%. Again, they experienced push back. If the Greeks get off the hook, other 'weak' countries may try the same tact--and that's why it will be difficult for other countries to agree with letting the Greeks off; the domino effect would begin; and that might be lead to the collapse of the Euro market. Some compromise might be granted, but it will be limited.
Just my opinion........
Don.....

 

[jim4silver]

I am going to go out on a limb and predict that the Euro folks won't let Greece default, at least not yet. Although logically it seems they should let them (Greece) default, and they probably don't deserve any more bailouts since they will most likely never get their $h!t together as a country. But to let them default now will cause the Euro to lose more value and the Euro folks don't want that. Plus there are other countries that might decide to do the same thing.

At the same time, the Greece gov probably doesn't have many alternatives than to take whatever Euro folks offer. It sounds cool to say "f' you, we don't want your austerity or your bailouts", but without other options it will be difficult.

I hope I am wrong and they let them default, which is what needs to happen before there will ever be anything resembling a lasting fix. Kind of like having a delinquent, drug addict kid who is broke all the time, and the parents keep giving him money and credit cards and tell him to give up the drugs, but he says "I can use all the drugs I want, go to he!!", and the parents keep giving in. I wonder what the Greek gov will do if it has to fend for itself? Maybe other countries will give them $$$ to have their military presence in Greece with bases, etc.

PS It would seem that if they do default and the Euro falls, the dollar will go up and PM's might fall. But if they reach a new deal, the dollar will fall and PM's should rise. But the markets don't seem to follow conventional wisdom much so anything is possible.

Just my opinion.

Jim

 

[jim4silver]

One of the online (overseas) gambling sources has the betting odds listed that Greece will leave the Euro in 2015 as 9/4 (means you bet $4 and win $9- plus your orig $4 back if Greece leaves Euro). And 1/3 that Greece remains in Euro in 2015 (you bet $3 and win $1- plus your $3 back if Greece does not leave Euro in 2015). Another had Greece staying in at 1/4. Thus, there seems to be a likelihood Greece will stay in. I have found these "oddsmakers" to be better gauges regarding "politics" than other sources. They called several of our US elections pretty accurately when the surveys and online pundits were calling for the opposite results.

Right now the news and online "vibe" is Greece is leaving and they just might, and I kind of hope they do. But I will be more surprised if they DO leave than if they stay. I don't gamble, but if I did I would bet they reach a last minute deal.

Just my opinion.

Jim

 

[bradley1719]

One of the online (overseas) gambling sources has the betting odds listed that Greece will leave the Euro in 2015 as 9/4 (means you bet $4 and win $9- plus your orig $4 back if Greece leaves Euro). And 1/3 that Greece remains in Euro in 2015 (you bet $3 and win $1- plus your $3 back if Greece does not leave Euro in 2015). Another had Greece staying in at 1/4. Thus, there seems to be a likelihood Greece will stay in. I have found these "oddsmakers" to be better gauges regarding "politics" than other sources. They called several of our US elections pretty accurately when the surveys and online pundits were calling for the opposite results.

Right now the news and online "vibe" is Greece is leaving and they just might, and I kind of hope they do. But I will be more surprised if they DO leave than if they stay. I don't gamble, but if I did I would bet they reach a last minute deal.

Just my opinion.

Jim

I agree. I think they will reach a last minute deal. Both sides will "give a little" to make it work. I too would like to see Greece leave the Euro Zone if for no other reason than to show other countries that they can't mess around with this stuff. There are consequences for your actions.

You can't keep threatening a child over and over and over again and never follow through on your threats. At some point you have to spank them to show them that there are consequences for their actions. Otherwise, they'll just continue to walk all over you.

 

[jim4silver]

Looks like the the banks in Greece will be closed for the next 6 days. Anyone who still has their money in these banks is a fool. This greek drama has been playing out painfully slow for months. People had plenty of time to move their money someplace else. Will be interesting to see if a "bail in" happens this time like it did in Cyprus. I think they can still ultimately reach a deal though.

PS If there is a person in Greece who is a gold or silver stacker right now, he has to feel a bit better than the rest of his neighbors right about now; those neighbors who could possibly lose some of their bank deposits depending on what happens later on.

http://www.bbc.com/news/world-europe-33305019


Just my opinion.

Jim

 

[Mackaydon]

The Greek 'smart money' has had months (of anxiety) in which to pull their deposits out and move them to a safer location.
A far cry from our panic of Oct and Nov of 1929 when millions of investors got whipped out 'overnight'; especially those who could not meet their margin calls.
Don...

 

[coinbug]

Go or stay, it's bullish for PMs.

Sooner or later the coin will drop and they'll be seen as a safe haven.

The Greeks should get out of the EU and the euro, but public sentiment is against that - a classic case of the fool siding with the knave - but it doesn't much matter for PM prices, except perhaps for timing (which I've completely given up on).

Whichever way it goes, the show will likely continue longer than we expect but the real risk isn't Greece - which would be insignificant in a rational world - but in the derivative bets that have been placed on this trade.

Perhaps God knows how this will unwind, but She ain't telling.

 

[jim4silver]

Can someone explain why the US dollar is falling today on this Greece news?

Jim

 

[jim4silver]

I still kind of believe the Greeks will make a deal. Since silver drops no matter what happens in the world anymore, I won't even guess what will happen to it.

But for now I have to admire the Greek leader(s) for at least keeping their campaign promises and seemingly doing what their majority want done, unlike our politicians here who seem to say whatever it takes to get elected, then do otherwise (talking both dems and repubs- both different sides of the same coin).

Just my opinion.

Jim

 

[Mackaydon]

The Greeks and the EUs may make a deal, but based on the stable or descending price of gold and silver, those PMs don't seem to have the same "save haven" attraction as they once did. If that be the case, what is the current 'safe haven' for investors/depositors; their mattresses?
Don....

 

[jim4silver]

The Greeks and the EUs may make a deal, but based on the stable or descending price of gold and silver, those PMs don't seem to have the same "save haven" attraction as they once did. If that be the case, what is the current 'safe haven' for investors/depositors; their mattresses?
Don....

Don,

Not to harp on manipulation, but doesn't it seem strange that silver is always going down, even though things that traditionally made silver go up don't work anymore? Dollar up, silver down. Dollar down, silver down. A country about to crash, silver down. Solar use up and projected to soar in future, silver down. National debt skyrockets here and debt grows all over the world, silver down.

The price is what it is, no doubt, but don't believe the game is over. Ever watch a football game where one team is getting killed going in to half-time, but all the sudden they rally and win later in the game? That is how I see PM's in the future. The deep pockets (govs, banks, etc) that have unlimited $$$$ to have their way in the paper market will keep doing what they do, until a point in time comes when physical silver and gold are demanded (not paper futures, certificates where gold held for you, ETF's, egold, feel free to add any other BS physical PM substitute you wish, etc).

It will probably take a real crash of some sort, or another "bail in" to get PM's going up again. I have 20 years or so until retirement (if I ever can do that), so I am not concerned right now. I have a colleague that wants me to look at her deceased grandmother's coin collection this week- lots of junk silver and who knows what else that has been untouched for years, so I welcome these cheap prices.

Just my opinion.

Jim

 

[Mackaydon]

IMO, today, forces (political and ??)-- stronger than Supply/Demand and 'safe haven' are influencing the prices of PM.
And if you need any assistance ID-ing certain coins from your deceased G/M's collection, let me know; it's my forte.
Don.....

 

[bradley1719]

Don,

...

Not to harp on manipulation, but doesn't it seem strange that silver is always going down, even though things that traditionally made silver go up don't work anymore? Dollar up, silver down. Dollar down, silver down. A country about to crash, silver down. Solar use up and projected to soar in future, silver down. National debt skyrockets here and debt grows all over the world, silver down.

...
Jim

Well.... if you are like me and believe that the current price of silver should be less than $15, then this is not so surprising. If the price is higher than it "should be" anyway then standard things like the dollar going down would not cause the price of silver to automatically go up. Now if you get to a point where the level of fear takes a pretty good bump, then this would likely (temporarily) override the natural market forces that are trying to push the price silver back down to where it "should be".

If you think silver should be $20+ then I can see why you would be confused about the current price action because it doesn't support your world view. But for the last 3 years I've been of the opinion that fear has been the main driver of the silver price. And I've believed that we were way above where silver should have been during this time. So the recent price action of silver seems completely logical to me.

If silver isn't doing what you expect it to then you have to come up with some reason why that is happening. Most PM bulls like to keep their world view in tact and thus tend to blame outside forces like "manipulation". But some PM bulls (like myself) have looked at our world view and decided that it was potentially flawed. That doesn't mean I'm right. I could be completely wrong. But keep in mind, we both can't be right. And odds are.... neither of us are right!

 

[jim4silver]

Well.... if you are like me and believe that the current price of silver should be less than $15, then this is not so surprising. If the price is higher than it "should be" anyway then standard things like the dollar going down would not cause the price of silver to automatically go up. Now if you get to a point where the level of fear takes a pretty good bump, then this would likely (temporarily) override the natural market forces that are trying to push the price silver back down to where it "should be".

If you think silver should be $20+ then I can see why you would be confused about the current price action because it doesn't support your world view. But for the last 3 years I've been of the opinion that fear has been the main driver of the silver price. And I've believed that we were way above where silver should have been during this time. So the recent price action of silver seems completely logical to me.

If silver isn't doing what you expect it to then you have to come up with some reason why that is happening. Most PM bulls like to keep their world view in tact and thus tend to blame outside forces like "manipulation". But some PM bulls (like myself) have looked at our world view and decided that it was potentially flawed. That doesn't mean I'm right. I could be completely wrong. But keep in mind, we both can't be right. And odds are.... neither of us are right!

Bradley,

Can you explain why silver went to near $50 in 2011?

Jim