Close X Cookies are necessary for the proper functioning of 24hGold.com. By continuing your navigation on our website, you are accepting the use of cookies.
To learn more about cookies ...
EnglishFrench

A Train Wreck in the Bond Markets

IMG Auteur
 
Published : November 12th, 2012
376 words - Reading time : 0 - 1 minutes
( 1 vote, 5/5 )
Print article
  Article Comments Comment this article Rating All Articles  
0
Send
0
comment
Our Newsletter...
Category : GoldWire

 

 

 

 

Why investors, fearful of currency depreciation, have turned to gold...


Not so long ago, everyone seemed to think Greece was about to leave the Euro.


Well, it hasn't. Yet.


And remember when Spain's government was only days away from requesting a formal bailout?


Well, it hasn't. Yet.


Never underestimate the power of Europe's politicians to press the slow-mo button on the single currency car crash.


But how long can all this go on? Things are getting worse, not better. As FT Alphaville reports, Greece is facing another potential default next week, while Spain's auction of 5-Year bonds this week was described by one trader as "awful", with a wide range of bids suggesting little market consensus on how the bonds should be priced. Reuters reports that this was the first time in 18 months that Spain has tried to sell longer-term bonds.


Take a look at the following chart from the Spanish Treasury, showing the maturity profile of Spanish government debt. See the big spike for 2013?


Spain's debt is piling up at the short end. In a video recorded earlier this year, BullionVault founder Paul Tustain likens this phenomenon to a train wreck in the bond markets, with government debt piling up against the buffers until that government is either forced to default, or a devaluation of the debt is orchestrated with central bank assistance - for example with interest rates held below inflation for a sustained period.


Of course, devaluing debt means devaluing currency itself. This is where gold comes in.


Many investors worry that their currency will fail to hold its value. Many of those have turned to gold. At the time of writing, gold in Euros is within 1.5% of its all-time high set last month. For gold priced in Dollars, the gap is closer to 10%, from a high hit over a year ago.


Why the discrepancy? Because the crisis is more intense in Europe, that's why. The value of the Euro is under far greater scrutiny.


Many investors believe the Dollar will one day face a similar test. Some of those have added gold to their portfolio. To find out why, set aside twenty minutes or so and watch Paul's video from the beginning.



Looking to buy gold? Visit BullionVault...




 

 

Data and Statistics for these countries : Greece | Spain | All
Gold and Silver Prices for these countries : Greece | Spain | All
<< Previous article
Rate : Average note :5 (1 vote)
>> Next article
The London Gold Market Report is the daily market review from BullionVault, the world's largest physical gold and silver market for private investors. A full member of professional trade body the London Bullion Market Association, BullionVault publishes the LGMR every day that the market is open, bringing you insider comment and analysis from the very center of the world's $240 billion-a-day physical gold trade, and putting the latest gold price action into its wider financial and economic context. Please Note: This article is to inform your thinking, not lead it. Only you can decide the best place for your money, and any decision you make will put your money at risk. Information or data included here may have already been overtaken by events – and must be verified elsewhere – should you choose to act on it.
Latest comment posted for this article
Be the first to comment
Add your comment
Top articles
Latest Comments
Gold Surges Another 7% This Week...
12 Febovertheedge
"Buyers should be getting into position to buy on the next dip." Gold is up something like 16% so far this year. Should'a bought when it wa...
Here We Go Again: Banks Are Impl...
12 Febsonora69
What is going to happen NEXT Monday? The Shanghai markets are closed all this week for the Lunar New Year. Monday morning ( or Sunday night U.S. t...
First Report since April, 2014
05 FebAndy_K1
Jason, One of your articles written way back is one of the reasons I started paying attention to silver and shortly thereafter started to ...
Something has Changed in Gold St...
06 Febneville
No nothing strange has happened in GOLD stocks....absolutely nothing.....The fact of the matter is that you byrne have been playing the man and...
The Revisionist Theory and Histo...
05 Febovertheedge
"The key is in the hand of the U.S. government. It is the same key that was used to lockthe U.S. Mint to silver in 1873, and to gold sixty years la...
First Report since April, 2014
05 FebS W.1
Here I was just 2 days ago thinking whatever happened to that evangelical silver guy. Low and behold up he springs, like some spirit from the g...
LBMA Silver “Price”: A Perfect S...
03 FebS W.
There is no doubt that the Comex can be used as a casino for those who want to trade Silver up/or down or maybe some just wish to take a small punt...
LBMA Silver “Price”: A Perfect S...
30 JanOzSILV1
Bron refuses to EVER admit this market is a Casino and the disconnect between Paper and Physical is a big clue to this
Most commented articlesFavoritesMore...
World PM Newsflow
ALL
GOLD
SILVER
PGM & DIAMONDS
OIL & GAS
OTHER METALS
Mining Company News
Lara Expl.(Cu-Zn-Au)LRA.V
Revised Resource Estimate Report Filed for Maravaia Copper Gold Deposit
CA$ 0.34+1.49%Trend Power :
Corporate news
Black HillsBKH
Black Hills reports 4Q loss
US$ 51.64-2.75%Trend Power :
Corporate news
Kinder Morgan(Oil)KMP
Midstream Companies Were above the 20-Day Moving Averages
US$ 102.03+1.98%Trend Power :
Corporate news
Kinder Morgan(Oil)KMP
Midstream Companies Were above the 20-Day Moving Averages
US$ 102.03+1.98%Trend Power :
Corporate news
Devon Energy(Ngas-Oil)DVN
Gasoline Inventories Rose Last Week despite Fall in Production
US$ 21.69+2.07%Trend Power :
Corporate news
United States Steel(Fe-Sn)X
U.S. Steel (X) States Ratification of Labor Agreements
US$ 7.40+8.35%Trend Power :
Corporate news
Black HillsBKH
4:34 pm Black Hills Corp beats by $0.04, misses on revs; guides FY16 EPS below consensus
US$ 51.64-2.75%Trend Power :
Corporate news
Black HillsBKH
Black Hills Corp. Reports 2015 Fourth Quarter and Full Year Results
US$ 51.64-2.75%Trend Power :
Corporate news
Transcanada PipelinesTRP.TO
TransCanada to Sign Substantial Agreement to Benefit Québec Economy
CA$ 48.65+0.16%Trend Power :
Corporate news
Devon Energy(Ngas-Oil)DVN
4Q15 Crude Oil Prices: Fallout for the Energy Sector and SPY
US$ 21.69+2.07%Trend Power :
Corporate news
Comments closed