Global markets were on a roller coaster last week ever since Washington agreed to increase their debt ceiling and S&P downgraded the USA’s AAA credit rating to AA+.
As gold powers through the $1700 an ounce level, and after years of being warned, people are only now beginning to concede to the fact that the current fiat system of money is faltering and that gold plays an integral part of the world’s monetary system.
Gold prices surged in Asian trade Monday, after US authorities failed to agree on a debt ceiling, and with no apparent progress toward a deal the financial markets have the jitters. Spot gold traded as high as $1620 an ounce at 5 p.m. Singapore time.
The price of gold rallied above $1,600 an ounce Monday, as concerns about the Eurozone debt crisis and the lack of agreement on raising the U.S. debt ceiling prompted investors to seek a safe haven in the precious metal.
Euro-denominated gold extended its gains to hit a fresh record high on Monday as growing concerns over the Eurozone debt crisis fuelled interest in the metal as a haven from risk while pressuring the euro sharply lower against the dollar. Gold priced in euros almost hit €1110 an ounce after trading as high as €1,104.15 an ounce late Friday.
After 15 consecutive years of economic growth, Greece entered a recession in 2009. Greece's GDP growth has also, as an average, since the early 1990s been higher than the EU average. However, the Greek economy faces significant problems, including rising unemployment levels, an inefficient government, tax evasion and political corruption.
A little more than a year ago, Greek Prime Minister, George Papandreou, told the world that Greece did not have any financial problems. Soon after that, it transpired that the country was so short of cash, they urgently required financial assistance. A year later the situation in Greece is worse than what it was a year ago, and now Papandreou is fighting for his political career.
Last year Greece was in trouble. A year later the problem has deepened. While Greece may need up to 70 billion euros ($100 billion), on top of the existing EU-IMF loan, to keep from going bankrupt as it is unlikely to be able to return quickly to international borrowing markets sadly I think the country is doomed: Portugal, Ireland, and Spain are also drowning in debt.
