the fundamental change in perception and role of GOLD
will make radical shifts if...
- bank sector enjoys 2nd shoe breakdown like tech/telecom, combined with increased defaults in corporate bond land, plus sovereign defaults widen in South America, leading to a crescendo with DERIVATIVE EVENTS (rogue waves) as gold helps the breakdown along
- currency turmoil continues, as what I call the "hot potato effect" picks up, leading to volatile swings in the major currencies (dollar, euro, yen) which result in nobody wanting a strong currency, even as horrific printed money continues to flood the world financial system, debasing all three of them (euro the least)
these two developments might unfold
Puplava expects them
I see each progressing gradually, inexorably
absolutely zero "healing" which would move the financial systems away from these two likelihoods
I believe GOLD holds together the entire weaving of derivatives
it has provided ready capital from gold lease sales
its abuse has patched up the accidents hidden from view so far
the end result would (will) be that regional banks will offer the spotty defense as the US MoneyCenter banks come under severe stress, some of which will probably fail
imagine the world response when JPMorgo goes bankrupt !!!
the world response to dollars, TBonds, stocks, gold would be bigger than huge
some regionals participate too much in derivatives, but have little exposure to sovereign debt
FirstUnion and BankOne each had derivative losses in recent years
FleetBank is an exception, with Brazil debt exposure
if regional banks show more weakness, we could see some runs on banks
that is perhaps the climax on the gold panic scale
that would take gold into the #THOUSANDS
/ jim |
