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
Gold & Silver Prices in

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.
Comments closed
Latest comment posted for this article
Be the first to comment
Add your comment
Top articles
MOST READ
March 27, 1980 : Silver Thursday, or the end of the The Hunt Brothers Story - History of Silver - Playboy  (4)
The US Constitution and Money - Michael S. Rozeff - Mike S. Rozeff  (8)
The Gold Bug (Edgar Allan Poe) - Treasures and Gold Fever - Edgar Allan Poe  (13)
What is Money? - Mike Hewitt - Dollar Daze
Most commented articles More... 
TOP RATED
The Gold Bug (Edgar Allan Poe) - Treasures and Gold Fever - Edgar Allan Poe  (13)
Discovery of Governmentium, the heaviest known element - Food for thought - Hat Trick Letter  (17)
The US Constitution and Money - Michael S. Rozeff - Mike S. Rozeff  (8)
Introduction to Economic Sophisms - Frederic Bastiat  (4)
Most commented articles More... 
MOST COMMENTED
100 Items That Disappear First in a Disaster - Beans Bullets Bullion and Bible - 24hgold  (17)
Most commented articles More... 
Latest Comments
‘Real’ Performance Comparison
26 MarChristopherbalz
Question: In the method of figuring inflation referenced, what is the rationale for adding population growth to productivity growth? Sugge...
100 Items That Disappear First in a Disaster
23 Markevthorne
68, 69 probably not that safe - particularly if you're growing your own vegetables - keep a Maine Coon cat instead: does the job automatically.
Farage Interviews Le Pen: “Prison of the EU”
21 Marneville1
BRITANNIA RULES THE WAVES AND NOW BREXIT WAIVES THE RULES. GO FOR IT FRANCE AND RID YOURSELVES FROM THE CHAINS OF IDIOTS. NOT SIN...
How the Fed Operates — And Why It's a Problem
20 Marramasart
In a nutshell, the Fed facilitates the theft of the value of the dollar, as they can control the increase in supply which at the same time inverts ...
How the Fed Operates — And Why It's a Problem
20 Marneville1
With all due respects for outlining how the crooked american Fed works or should work. From all our research we find the following the Fed...
Sparta - Gold prohibition in a collapsing economy
18 Markevthorne
You've answered none of the authors points: your comment is flat rubbish.
America Too Broke to Fix Crumbling Infrastructure? “Bridges, Roads,...
16 MarCameron Waugh1
Just like the leaders of the Bolshevik revolution were not Russians, those formulating belligerent US foreign policy are not Americans, and they ha...
POTUS at SOTUS
16 MarDRGEORGE1
Try explaining that to my patients dying on public waiting lists or getting ripped off by exorbitant private specialist fees!
Most commented articlesFavoritesMore...
World PM Newsflow
ALL
GOLD
SILVER
PGM & DIAMONDS
OIL & GAS
OTHER METALS