Billionaires Boost Gold Positions While Euro Zone Mulls Greek Exit
August 20, 2012
By James O'Dell
August 20, 2012, Los Angeles – Gold bullion prices edged higher on Friday, gaining 0.03 percent or $0.60 to close at $1,614.50 an ounce, on positive comments by German Chancellor Merkel adding support for future action by the European Central Bank (ECB) to halt the debt crisis. The Silver price eased 0.39 percent or $0.11 to close at $28.04 an ounce, while the Gold/Silver ratio, the number of ounces of Silver it takes to buy one ounce of Gold, climbed to 57.58, as Silver under-performed Gold.
The precious metals markets took notice recently when two noted investors, both billionaires, John Paulson and George Soros, boosted their positions in Gold. Richard Russell, noted author of the Dow Theory Letters, has been encouraging his subscribers to buy Gold since very near the beginning of the current bull market in Gold, which got its start back in 2001.
Russell suggests that since the U.S. has by far the largest Gold holdings in the world, the obvious action would be a unilateral move to increase the price of Gold, which would simultaneously devalue all existing paper currencies, including the dollar. "The U.S. dollar must be devalued in order to shrink the destructive power of debt," wrote Russell, before suggesting that all his subscribers should "have some kind of a position in Gold, preferably Gold coins."
In the euro zone, after selling over 4 billion euros worth of three month bills on Tuesday, analysts say Greece will have the funds needed to repay 3.2 billion euros in bonds held by the ECB that will be maturing on August 20, thereby avoiding default once again. It is still unclear, however, whether Greece will be able to remain in the euro zone, especially with Citi pushing its prediction for Greece to leave the currency union to 90 percent. While the euro zone recently bolstered its firewall, economists are still unable to predict what would happen, should Greece opt to leave the currency bloc.
The stakes are high with interest rates on Spanish and Italian debt, approaching unsustainable levels again. "No one wants to gamble on a disorderly Greek exit from the eurozone," said Nicholas Spiro, of Spiro Sovereign Strategy. Don't leave your assets unprotected during these times of economic and geopolitical uncertainty, invest in physical Gold and Silver bullion and protect your wealth.
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