Greece is out of money, 'on war footing'

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From the (UK) Telegraph:

Greece is out of money, 'on war footing'

By Ambrose Evans-Pritchard, in Athens

Greece is sliding into a full-blown national crisis as the final cash reserves of the banking system evaporate by the hour and swathes of industry start to shut down, precipitating the near disintegration of the ruling coalition.

Business leaders have been locked in talks with the Bank of Greece, pleading for the immediate release of emergency liquidity funds (ELA) to cover food imports and pharmaceutical goods before the tourist sector hits a brick wall.

Officials say the central bank will release the funds as soon as Friday, but this is a stop-gap measure at best. "We are on a war footing in this country," said Yanis Varoufakis, the Greek finance minister.

Read the whole story here.

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From the (UK) Telegraph:

How do you change a currency – fast?

By Isabelle Fraser

The drachma was the world's oldest existing currency before it was replaced by the euro on Jan. 1, 2001. And it may be about to make a comeback. This Sunday's referendum is described by European leaders as a vote for or against the euro. If Greece votes "oxi," the country may soon be looking for a new currency.

Haris Theoharis, a politician in the centrist party To Potami, said: "There's already a team within the prime minister's office, with staff from the general accounting office, right now working on the drachma."

But how? Has anything like this ever been done before?

Not really. The last time a currency union broke up was the Austro-Hungarian Empire in 1918.

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From Kitco News:

Main Street bearish on gold for 5th straight week; Wall Street slightly bullish

With gold prices hitting their lowest level in three and one-half months Thursday, it might not be surprising that retail investors remain negative on the yellow metal for the fifth straight week.

A weaker-than-expected June nonfarm payrolls report only managed to push gold prices off their session lows as the market prepares to end the second consecutive week in negative territory.

The weekly Kitco News Wall Street vs. Main Street Weekly Gold Survey, which was conducted a day earlier because of U.S. Independence Day, shows once again that a clear majority of retail investors are bearish on gold next week; at the same time, market experts remain in almost in a tie.

This week 211 people participated in Kitco News’ online survey. Of those voters, 119 people, or 56 percent, expect to see lower gold prices next week; 62 participants, or 29 percent, expect to see higher prices next week. Thirty people, or 14 percent, are neutral on the gold market.

For the third week in a row, the market professional survey remains relatively uncertain about gold price in the short term, with the bulls and bears caught in another statistical tie. Out of 33 market experts contacted, 18 responded; of those, eight participants, or 44 percent, are bullish on gold next week. Seven experts, or 39 percent, are bearish, and three people, or 17 percent, are neutral on gold. Market participants include bullion dealers, investment banks, futures traders and technical-chart analysts.

Pessimism in the gold market among retail investors has been steadily growing but some do believe that the continued downtrend could be coming to an end.

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From Newsmax.com:

Lewitt: Buy gold now as central banks keep on printing money

Gold is one of the best long-term investments available today, even as the U.S. dollar's value improves compared with other currencies, said strategist Michael E. Lewitt.

"The hierarchy of global currencies remains gold-USD-euro-yen," he said in this month’s edition of his "Credit Strategist" newsletter. "Gold has yet to make its move but investors should use gold’s recalcitrance as an opportunity to buy and save themselves."

Gold more than doubled from 2008 to 2011 as the global economy suffered the worst recession in 80 years and central banks responded by flooding markets with dollars, euros and yen. The yellow metal gradually fell about 40 percent from the peak of $1,923 an ounce while business activity recovered and investors shifted money into higher-yielding assets.

Lewitt said gold’s value will rise as central banks devalue their currencies to aid growth. The European Central Bank and Bank of Japan are buying bonds to drive down interest rates, while almost two dozen countries including Russia, China, Canada and India have cut borrowing costs this year.

Gold's subdued reaction to the Greece's financial disarray can be attributed to the nature of the crisis, said Brian Kelly, founder and managing member of Brian Kelly Capital.

"There is no reason for gold to get any love now because this is a political crisis, not a currency crisis," he said on CNBC.com. "Gold is only useful in a complete currency collapse, as long as there is a viable alternative that is integrated with a banking system then gold will remain unloved."

Read the whole story here.

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From BullionStar.com:

Former U.S. Mint director clueless on gold in Fort Knox

Gold researcher and GATA (Gold Anti-Trust Action Committee) consultant Koos Jansen disputes in great detail assurances that have been given over the years by the former director of the U.S. Mint, Edmund C. Moy, about the U.S. gold reserves at Fort Knox. Jansen's commentary is headlined "Former U.S. Mint Director Clueless on Gold in Fort Knox" and is posted at BullionStar here.

Also, Jansen has provided an English translation of a report about China's plan for the Silk Road Gold Fund, whose aim is "bringing gold's superiority into play." Jansen's commentary is headlined "Gold Fund to Serve the New Strategy of the Silk Road, Lead the New Gold Development" and is posted here.

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From Reuters:

China targets counterweight in gold trade with yuan fix

A decade after China kicked off a series of gold market reforms, plans to establish a yuan price fix mark one of Beijing's biggest step so far to capitalize on the country's position as the world's top producer and a leading consumer.

While no immediate threat to the gold pricing dominance of London and New York, the benchmark could ultimately give Asia more power over bullion trade, particularly if the yuan becomes fully convertible, industry sources say.

The yuan fix is due to launch by the end of 2015 via the Shanghai Gold Exchange, which last year allowed foreign players to trade gold using offshore yuan.

"Across the commodity markets as a whole, we're seeing some very significant initiatives by the Chinese authorities," said Nic Brown, head of commodities research at Natixis. ...

Read the whole story here.

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