The expected sell-off we warned of last week took place Tuesday morning as Gold hit a two week low. Last reported a.m. gold is at $1188.10 and silver is $16.84. The $1200.00 threshold remains the sell-line for investors and only political and economic turmoil can change the trend. Both of which we see coming in the not too distant future when considering Greece and “war rhetoric” between Washington, Russia, China and the Middle East.
The Department of Commerce said the U.S. manufacturing industry weakened in April as new orders for long lasting manufactured goods fell by 1.2 billion to 235.5 billion last month.
China’s state run newspaper is warning Washington that “war with the U.S. in inevitable unless Washington backs off, over the ongoing dispute in the South China Sea.” On Tuesday, China outlined plans to shift from defensive military posture to placing more emphasis on offensive capabilities. China maintains it has a right to continue building artificial islands in what it say’s are territorial waters. Washington is demanding that China halt any further construction and is refusing to recognize Chinese sovereignty.
China is laying claim to 90 percent of the South China Sea overstepping the claims of, Brunei, Malaysia, Taiwan, Vietnam and the Philippines.
China claims that last week it drove away a U.S. surveillance plane labeling U.S. actions a security threat to China’s islands and reefs. Foreign Ministry spokesman Hong Lei said, “such action is likely to cause an accident, it is very irresponsible and dangerous and detrimental to regional peace and stability. We express our strong dissatisfaction, we urge the US to strictly abide by international law and international rules and refrain from taking any risky and provocative actions.”
Further stating, “China will continue to closely monitor the relevant area and take the necessary and appropriate measures to prevent harm to the safety of China’s islands and reefs as well as any sea and air accidents.”
Greece has postponed a meeting scheduled for today with its creditors as it admits the payment due the IMF June 5th is not possible without the country receiving all or a portion of the 7.2 billion euro bailout.
Interior Minister Nikos Voutsis told television station Mega that Greece is scheduled to repay 1.76 billion euro to the IMF between June 5-19, but the payments cannot be met because the money doesn’t exist.
Look for the euro to take a beating and a soon coming rally for the U.S. dollar should we see a Greek default. Our bet is a default is coming quickly.
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