Monday, June 21, 2010


clipped from

And are we any safer now that the EU has failed to restore full confidence
with its €750bn (£505bn) "shock and awe" shield, that
is to say after throwing everything it can credibly muster under the
political constraints of monetary union? This is the deep angst that lies
behind last week's surge
in gold to an all-time high of $1,258 an ounce

The World Gold Council said on Friday that the central banks of Russia, the
Philippines, Kazakhstan and Venezuela have been buying gold, and Saudi
Arabia’s monetary authority has "restated" its reserves
upwards from 143m to 323m tonnes. If there is any theme to the bullion rush,
it is fear that the global currency system is unravelling. Or, put another
way, gold itself is reclaiming its historic role as the ultimate safe haven
and benchmark currency.

It is certainly not inflation as such that is worrying big investors, though
inflation may be the default response before this is all over.