After the gold price collapsed yesterday by over 3%, now is a perfect opportunity to buy your discounted gold. As Euro countries debt to GDP ratios approach 90-100%, their ability to service their debt is fast diminishing. Couple this with rising bonds prices, slow economic growth and the lack of the market to invest in risky european soverign debt, gold is looking more attractive.  

As outlined by Michael Pento there exists only 2 possibilities.

“The country can declare bankruptcy and default on the debt outright—which is the smartest route to take.  The other option—and the one that all fiat currencies take—is to monetize the debt.  However, this default by means of inflation doesn’t solve the problem, it only extends and exacerbates the default process.

 Since it has been made clear on both sides of the Atlantic that an inflation led default will be deployed, it makes sense to avail yourself of the best protection against the ravages of a crumbling currency.  That is why gold is a buy, especially when you are fortunate enough to get a pullback.”

 

 

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