[deMolay]

I think soon the dam will break and both the EU and the US will have to devalue currency. Obama can't keep printing money and using debt to paper over the trade imbalance with China and the world. http://network.nationalpost.com/np/blog ... e-way.aspx

[deMolay]

An another article on this topic. Maybe people are starting to see that The Emperor Has No Clothes. http://www.thestar.com/News/Insight/article/594406

[Jotapay]

CNBC on Friday was actually using the term "Flush Day", when confidence breaks and everyone sells equities and treasuries at the same time. Got gold?

[bencole]

CNBC on Friday was actually using the term "Flush Day", when confidence breaks and everyone sells equities and treasuries at the same time. Got gold?

CNBC on the same day was making a lot of reference to the fact that gold went down all week long. It was over 1000 per ounce, now down below 950 again. They seemed to be a bit confused as to why gold was going down at the same time the stocks were declining.

Gold futures contracts are moving down in price, this is paper gold right?.
Would the situation hold if parties where requesting more physical delivery? Do you think the sign of the futures contract going down in price somehow reflects a lack of confidence in future physical delivery maybe?

[ReverseEngineer]

If all currencies are devalued, no currency is devalued. Its relative. You would have to decide which currency is the least bad in order to value it above other currencies, but how can you tell who is worst off? The Euro is in the toilet due to bad loans to the old Soviet client states, the Dollar is in the sewer because of massive Goobermint debt, the Yen is in a cesspool because of falling exports and the the Yuan is landfill because of closed Chinese factories and drought on half the farmland of China. Who would you bet on above the others?

Reverse Engineer

[eXpat]

After the EU summit

The Hungarian forint and Polish zloty were the two biggest losers, falling 2.50 and 2.40 percent respectively, both down more than 13 percent on the year to date although above record or multi-year lows set earlier this year.

The Czech crown lost 0.87 percent, while the Romanian leu was the region's best performer, down 0.19 percent but supported by talk of potential central bank intervention.

'The FX market's perception of the summit should be clear: the EU again has proven that it is unable to manage a coordinated response to the crisis,' Commerzbank wrote in a research note.

Further undermining sentiment, Morgan Stanley lowered its price target on several banks it said were particularly exposed to losses in Central and Eastern Europe.

The cost of insuring central European sovereign debt in the credit default swaps market was also higher, with both Poland and Hungary seeing CDS prices rise 10 basis points, putting the cost of insuring Hungary's debt at 590 basis points.
Latvia saw the cost of protecting its debt rise 40 basis points to hit a new record of 1050-1150 basis points, with the central bank saying it had spent 40 million euros to support the currency last week.

That was the first time the country had intervened to support the currency since it was baled out by the IMF in December. The lat came under pressure last week after the government collapsed and ratings agency Standard & Poor's downgraded the country to junk status.

Problems were not limited to emerging Europe. The Turkish lira hit its lowest rate in more than three months while Kenya's shilling fell to a four-year low against the dollar, with data showing hard currency inflows from Kenyans abroad fell 27 percent in January from a year earlier.

Israel -- still trying to form a government after its election as well as dealing with the global financial crisis -- also saw its CDS prices rise to a new record high of 291 basis points

http://www.peakoil.com/forums/posting.php?mode=reply&f=33&t=51324
Hold on to your seats...

[poppabear]

I think soon the dam will break and both the EU and the US will have to devalue currency. Obama can't keep printing money and using debt to paper over the trade imbalance with China and the world. http://network.nationalpost.com/np/blog ... e-way.aspx

There's no doubt about it, the US Government is printing Trillions in fiat to bail out banks and insurance companies. The bailout is the real theft, because it debases the currency. Let the banks fail and the bankers lose, but bail them out and the taxpayers have their pockets picked. Goldman Sachs recently covered a very large short position in gold that they were holding on the Japanese Commodities Exchange. They must know something about the prospects of gold and the future of the USD. Read the following article....

[Snowrunner]

I think the day of Reckoning for the Euro will come much later than for the USD.

The question is: When does the world give up on the USD? The saving grace for it right now is that many contracts and even more debt is still denoted in it and people will try to pay it off in USD. But if just a few decide to just write it off and go somewhere else the dam may break.

The situation in Europe is not pretty either, but it is much more convoluted, mainly, most of the debt in Euros isn't held by countries that are actually part of the EMU.

Interesting times are surely ahead, today was already interesting and I doubt the next few months will be any less interesting.

I need to check the popcorn stores.

[SeaGypsy]

Might the article of Kunstler's point to timing?

When a country has the population baying for bread they may well choose to default. Kunstler points to the timing of planting season in the Northern hemisphere, droughts etc
.http://www.kunstler.com/mags_diary25.html

[ReverseEngineer]

Might the article of Kunstler's point to timing?

When a country has the population baying for bread they may well choose to default. Kunstler points to the timing of planting season in the Northern hemisphere, droughts etc
.http://www.kunstler.com/mags_diary25.html

Why would a country "baying for bread" choose to default? It would seem to me this would result in less bread available.

Reverse Engineer

[SeaGypsy]

I am thinking that if the population is baying for bread literally, the state's ability to feed them will come down to what it can get a hold of.

I am assuming a currency collapse& debt failure would occur at the same time. Either could trigger the other. Agricultural failure would multiply the damage.

In the new Amero currency (?) who would have the upper hand in a renationalized global financial system?

Would it not be in the USA's interest TO crash the financial markets and currency, let chaos emerge for a bit then knight in shining 'Amero' comes to save the day?

[Blacksmith]

Gold futures contracts are moving down in price, this is paper gold right?.
Would the situation hold if parties where requesting more physical delivery? Do you think the sign of the futures contract going down in price somehow reflects a lack of confidence in future physical delivery maybe?

In a strange way you've nail it right on the head, if we couldn't trust junk bonds, subprime morgages, or rating agiencies. How can we trust paper gold? In the 70's when gold went so high the was a glut of kruger rands on the market.