Gold is lower today against solid gains in the U.S. dollar index as global stock markets rallied, both for no apparent reason. Gold last reported p.m. is $1186.10 down $15.20 and silver is $16.72 down 40 cents.
Talks over the weekend between Greece and the European Union did not go well as EU officials contend Greece’s proposals are inadequate. The Fitch ratings agency further lowered its credit rating on Greece last Friday. Mainstream pundits suggest there is no cause for alarm that Greece will default on its debt. These same pundits are shipping magic money trees to Greece just to make sure. Can we have one as well?
Without going further into debt, Greece faces absolute bankruptcy in the not too distant future. EU Commission spokesman Margaritis Schinas said a deal on comprehensive reforms still requires a lot of technical work, even after hours of work over the weekend. Greece has been surviving on EU handouts for five straight years while imposing austerity measures that continue to loot pensions. Greece faces debt repayment of $3.3 billion in mid April.
Germany being the largest individual creditor to Greece’s bailouts say’s a lot more needs to be done before they will agree to more bailouts. Finance Ministry spokesman Martin Jaeger said the talks were, “a little hard to evaluate, clearly not an officially submitted comprehensive reform list.” Greece has nothing to offer but a devastated economy and debt ridden promises with no real hopes of ever improving. Growing debt will continue to suffocate any life that remains. The EU is simply attempting to figure a way out of this without suffering total monetary loss. Look for Greece to exit the EU one way or the other.
Goldman Sachs is warning of peak gold production and it may happen in 2015. Eugene King of Goldman Sachs believes there are only 20 years of known mineable reserves of gold and diamonds. “Discoveries of new mineable gold reserves peaked in 1995 at around 140 million ounces. This followed steady annual increases since 1991 when global discoveries were around 60 million ounces.
Throughout 2013, new discoveries totaled less than 10 million ounces. This trend has followed recent pullbacks in gold prices but data also shows gold discoveries were in decline even as prices rose.
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