Failing Trust in Paper Currencies Creating Desperation for an Alternative

The people of Cyprus forced their leaders to shoot down an EU demanded raid on all deposits on March 27th; banks subsequently reopened after two weeks of closure to a rather calm queuing crowd. However, two major banks still stand to collapse due to the forced taxation of deposit accounts worth more than 100,000 Euros. The depositors stand to lose perhaps as much as 60% of the value of their accounts, leaving people frantic to get whatever money they can out of Cyprus and its financial system.

But getting money out of Cyprus is easier said than done, because the fever seems to be spreading elsewhere in Europe.

With distrust in the Euro reaching new heights many depositors are flocking to the digital currency Bitcoin, supposedly for its relative safety to the fiat currency. And it’s not just in Europe. The value of a dollar is questionable these days, given the incessant churn of the printing presses under QE4. Countries are turning inwards, frantic to manage their own paper burn. As a result, there’s a growing desperation among people around the world for safety, even if it’s with an unproven and decentralized market like Bitcoin.

But what about gold and silver? As currencies and for movement of value across sovereign borders, they’re proven, they’re stable, they’re time-tested.

It can’t be long before depositors snap out of their fear, come to their senses and begin to move what is left of their burned paper into physical gold and silver. Before they snap out of it, you should snap up some gold.

As our chart of the week indicates, in scenarios like these, gold tends to leap in price, and out of reach of the indecisive. Protect your paper dollars with gold and silver. They’re still in the buy zone, which is fortunate if you haven’t gotten in yet. You still have a fantastic opportunity. Get in now.

Precious metals on the move

London Fix PM price at week’s end, and change over previous Friday:

  • Gold: $1,598.25, down 0.6%
  • Silver: $28.64, down 1.5%
  • Platinum: $1,576.00, down 0.3%
  • Palladium: $770.00, up 2.1%

In the news

Why bother with Bitcoin when gold is the best alternative currency on the planet?
“Why would anyone trust an electronic form of money that could get hacked and then diluted into oblivion? We already have a form of money that is indestructible and whose supply cannot be increased by any government or individual decree. It’s called gold.” — Michael Pento, president of Pento Portfolio Strategies (link)

Preparing for the euro collapse, purchases of gold coins surge across the union
“The proposed levy on deposits of Cyprus’s savers has not only shaken confidence in the single-currency Eurozone, it illustrates the fragility of savings held within the banking system. In our experience, clients are attracted to gold because it offers insurance against extreme movements in the value of other assets. Unlike paper currency, it will never lose its intrinsic value.” — Daniel Marburger, a director of Jewellers Trade Services Partners (link)

April could get pretty wild for stocks
“My best guess is that billions of dollars of stock will be sold between now and April 15 to pay taxes. And when the market has been as strong as this one, up 20 percent since the start of 2012, lots of taxpayers are waiting until the last moment to sell.” — Charles Biderman, founder of TrimTabs (link)

Chart of the week

Is gold positioning for a rally?
oversold gold

The week ahead

  • Fear of contagion from Cyprus may leap from words to reality
  • Cyprus begins to recalibrate its financial system Laiki bank falls first
  • Bears growl louder for the end of a gold bull market, prematurely
  • QEternity continue to promote an oversold S&P 500
bitcoin, currency, eurozone, Featured, gold, quantitative easing, silver