Read the Beforeitsnews.com story here. Advertise at Before It's News here.
Profile image
By DavidLevenstein (Reporter)
Contributor profile | More stories
Story Views
Now:
Last hour:
Last 24 hours:
Total:

Geopolitical Tensions As Well As Ongoing Currency Debasement Will Push Gold Prices Higher

% of readers think this story is Fact. Add your two cents.


The global gold markets were subdued on Monday as volumes were low mainly on account of the short trading day in the U.S. markets due to Presidents Day. Gold fell last week, but managed to bounce off their weekly lows. After slipping briefly below $1220 an ounce on Thursday, the price recovered later in the day and edged slightly higher on Friday to close out the week at $1227.90 per ounce.

Although a ceasefire between Ukraine’s army and pro-Russian rebels came into effect from 22:00 GMT Saturday, there have been several accounts of fresh gunfire. Associated Press journalists traveling toward Debaltseve from the north on Sunday morning heard explosions from about 25 kilometers (15 miles) away. A Ukrainian officer, whose unit’s tanks were parked by the side of the road, said it was the sound of rebels firing. This could not be confirmed independently.

Donetsk, the main large city under separatist control, was quiet on Sunday morning with no shelling from government forces, the Donetsk News Agency, a separatist mouthpiece, reported, citing the city administration.

Despite the fact that Ukraine is one of the most corrupt countries in the world, the International Monetary Fund (IMF) announced a new $17.5 billion lifeline for Ukraine, which would bring the total bailout package to $40 billion. The new sum would be a four-year program.

The IMF chief, Christine Lagarde will propose the $17.5 billion expansion program to the IMF by the end of the month.

“The program is not yet approved by the governing council. I hope to offer it for approval by the end of February,” she said Thursday.

“This new four-year arrangement would support immediate economic stabilization in Ukraine as well as a set of bold policy reforms aimed at restoring robust growth over the medium term and improving living standards for the Ukrainian people,” Lagarde said in a statement.

In return Ukraine will have to present a “program of deep economic reforms,” which includes the whole economy and a plan to transform, Naftogaz, Ukraine’s state oil and gas company. 

“The sum includes funds from the IMF and the EU, and also bilateral and multilateral loans.”

Earlier this month, the US promised Ukraine as much as $2 billion in loan guarantees, while the EU said it would disburse €1.8 billion ($2.1 billion).

Corruption is a widespread and a growing problem in Ukrainian society. In 2014′s Transparency International Perceptions Index, Ukraine was ranked 142nd out of the 175 countries investigated (tied with Uganda and Comoros).Back in 2007 Ukraine had taken 118th place (179 countries investigated that year). Ernst & Young (in 2012) put Ukraine among the three most corrupted nations of the world together with Colombia and Brazil.

It remains a mystery to me why the major financial organisations such as the World Bank and the IMF as well as major governments are so willing to squander billions on useless loans to countries that are rife with corruption. There have been countless cases of this throughout Africa where only a small percentage of the money loaned was ever spent on the intended causes, while politicians in the respective countries suddenly became very wealthy for doing nothing. I wonder why?  It seems to me that as long as you are a politician, you can lie, cheat and steal. 

It is evident that governments have no problems squandering billions of dollars or lending tax payers money to corrupt governments, yet, at the same time attack hard working individuals who try to protect their own wealth. It is a disgrace! These politicians should be held accountable for these massive losses.

Talks between Greece and Eurozone finance ministers over the country’s debt crisis broke down on Monday when Athens rejected a proposal to request a six-month extension of its international bailout package as “unacceptable.”

Failure to reach any agreement has increased doubts about Greece’s future in the single currency area after a new leftist-led government vowed to scrap the 240 billion euro ($272.4 billion) bailout, reverse austerity policies and end cooperation with EU/IMF inspectors.

Dutch Finance Minister Jeroen Dijsselbloem, who chaired the meeting, said Athens had until Friday to request an extension, otherwise the bailout would expire at the end of the month. The Greek state and its banks would then face a looming cash crunch.

The European Central Bank will decide on Wednesday whether to maintain emergency lending to Greek banks that are bleeding deposits at an estimated rate of 2 billion euros ($2.27 billion) a week. The state faces some heavy loan repayments in March.

German Finance Minister Wolfgang Schaeuble said before the talks that Greece had lived beyond its means for a long time and there was no appetite in Europe for giving it any more money without guarantees it was getting its finances in order.

Greece’s current bailout program ends after Feb. 28, and without a new one, Greece faces bankruptcy — and a possible exit from the Eurozone, a development that would devastate Greece’s economy, at least in the short-term, and throw global financial markets into turmoil. But, whichever way you look at the situation, it is apparent that the current programme has not been successful.

According to several bullion dealers, demand for physical gold in Europe increased as concerns over the Eurozone’s outlook sparked by central bank action and anti-bailout party Syriza’s victory in Greek elections drove consumers to load up on bullion.

After the Swiss National Bank cut the franc’s peg to the euro, the ECB announced its new stimulus program which has been followed by a similar programme by Denmark and Sweden.

Only last week, the Swedish Riksbank, became the latest central bank to enter the currency wars when it announced that it is reducing its key rate from 0% to -0.10%. It will also begin its’ own bond buying program, buying 10 billion kronor of government bonds.

Sweden is the sixteenth country to cut rates this year. It claims to have made the move to combat deflation and is aiming for an inflation rate of 2%. It is widely believed that it is devaluing its currency to boost exports.

Denmark cut its key rate to -0.75 on February 5th matching the Swiss. Denmark is trying to maintain its peg to the euro in order to protect its own export industry, an effort which cost it 106.3 billion krone in January.

Denmark has lowered its rates four times this year to try to stem excessive demand for the krone following the SNB’s capitulation last month which came about due to fears that defending the peg to the euro would bankrupt the country following the initiation of the ECB’s QE program.

Sweden’s move is likely to put pressure on Norway to follow suit to protect its exports given the large amount of trade among the Scandinavian countries. The Bank of England is also considering a rate cut.

These events as well as the results of the elections in Greece prompted a 6.7% drop in the euro versus the dollar, its worst monthly performance since mid-2012, and sent investors scurrying into other assets, including gold.

The race to the bottom continues unabated in the currency wars. And, no matter where you live, if you are stupid enough to believe the rhetoric being spewed out by politicians then you deserve to suffer the consequences.

Unfortunately, you have to have a financial insurance policy that will save you from the actions of the current financial and political elite. While there are lots of great options available, owning physical gold and especially silver should be an essential part of this policy.

TECHNICAL ANALYSIS

The correction from $1300/oz. seems to have found support at around $1220/oz. I expect to see a resumption in the upward trend.



Before It’s News® is a community of individuals who report on what’s going on around them, from all around the world.

Anyone can join.
Anyone can contribute.
Anyone can become informed about their world.

"United We Stand" Click Here To Create Your Personal Citizen Journalist Account Today, Be Sure To Invite Your Friends.

Please Help Support BeforeitsNews by trying our Natural Health Products below!


Order by Phone at 888-809-8385 or online at https://mitocopper.com M - F 9am to 5pm EST

Order by Phone at 866-388-7003 or online at https://www.herbanomic.com M - F 9am to 5pm EST

Order by Phone at 866-388-7003 or online at https://www.herbanomics.com M - F 9am to 5pm EST


Humic & Fulvic Trace Minerals Complex - Nature's most important supplement! Vivid Dreams again!

HNEX HydroNano EXtracellular Water - Improve immune system health and reduce inflammation.

Ultimate Clinical Potency Curcumin - Natural pain relief, reduce inflammation and so much more.

MitoCopper - Bioavailable Copper destroys pathogens and gives you more energy. (See Blood Video)

Oxy Powder - Natural Colon Cleanser!  Cleans out toxic buildup with oxygen!

Nascent Iodine - Promotes detoxification, mental focus and thyroid health.

Smart Meter Cover -  Reduces Smart Meter radiation by 96%! (See Video).

Report abuse

    Comments

    Your Comments
    Question   Razz  Sad   Evil  Exclaim  Smile  Redface  Biggrin  Surprised  Eek   Confused   Cool  LOL   Mad   Twisted  Rolleyes   Wink  Idea  Arrow  Neutral  Cry   Mr. Green

    MOST RECENT
    Load more ...

    SignUp

    Login

    Newsletter

    Email this story
    Email this story

    If you really want to ban this commenter, please write down the reason:

    If you really want to disable all recommended stories, click on OK button. After that, you will be redirect to your options page.