...Italy’s 600 banks are riddled with 360 billion euro of bad loans, with some 200 billion euro already believed to have gone terminal, question being is whether a capital injection will ultimately address the deep malaise of 600 that operate on a business model that may no longer be viable. What Italy is asking for is against the European rules in place since 2013. State aid is only meant to kick-in as a last resort after the bank bondholders and large depositors have been bailed-in, i.e. suffered a haircut, as in losing some money. Should the European Commission relent & gives Italy the waiver it’s seeks, it's hardly likely a 40 billion bailout would work in a business model gone wrong. Should a nearly bankrupt Italy guarantee its banks, any sensible large depositor will simply use the opportunity to get down to the minimum state guarantee level, and place their euros elsewhere...
...But that’s not so easy as before, since the ECB & Swiss National imposition of the negative interest rate regime over much of Europe. Who'd place funds on deposit for a negative return when a bullion alternative is around, with seemingly, every prospect of the PM's rallying for months and years ahead. But they may need to be quick. Goldcore informs that a physical bullion crisis appears to have developed:
"Bullion banks “have been panicking” and advising that soon, they may no longer be able to quote
prices on large gold bar orders. This response is previously unheard of , indicative of increasing
illiquidity in the large gold bar market due to a recent surge in HNW, UHNW and institutional (wealth
managers, hedge funds, banks etc) Global demand coupled with already robust central bank demand."
...The increasingly illiquid physical gold market where supply cannot keep up with demand underlines the importance of owning physical bullion coins and bars – in your possession or having direct legal title to individual coins and bars. Bullion should be owned in your name, or be stored directly in the safest vaults in the safest jurisdictions in the world – outside the financial, banking system. IMO, we've not heard the last of Brexit, Italian banks, and the new gold rush, but everyone's heard of the 'early bird'...
...Seems even Greenspan, has found his gold side again:
“In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value.” Alan Greenspan 1966.
“If we went back on the gold standard and we adhered to the actual structure of the gold standard as it existed prior to 1913, we’d be fine. Remember that the period 1870 to 1913 was one of the most aggressive periods economically that we’ve had in the United States, and that was a golden period of the gold standard. I’m known as a gold bug and everyone laughs at me, but why do central banks own gold now?” Alan Greenspan. June 28, 2016
