Good morning Andrew,
Here are a few odds and end research articles to help convince you that Silver belongs in your portfolio despite the recent correction.....I have also included a couple of articles that help explain the Cyprus situation .....Please take time to read them.....Enjoy the rest of your weekend.....Peter
| March 18, 2013 | ||
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EXPERTISE If you had the chance to sit down and talk with the world's foremost expert on any subject you wished to discuss, that would be a great learning experience. Most certainly you would act on any advice that expert would give you. The leading expert in any field would be the type of genius that you would listen to closely. Every subject has endless people writing opinions, speaking out or reporting what others have said. A lot of it is false. True genius is rare. That's certainly the case with silver. Most of what you read or hear about silver that makes sense originated with Theodore Butler. He is the most plagiarized silver expert on the planet. That's because he is the world's foremost authority on the subject. He has totally immersed himself in the study of silver for 27 years and as a result has evolved into a bona fide silver genius. Nobody knows more about silver than Ted Butler. Furthermore, he has proven his deep understanding with accurate predictions about the price movement of silver. People who listened to him have for the most part realized handsome profits. He insists there is a lot more to come. Over the years he has produced groundbreaking analysis. He showed that gold and silver leasing was bogus. He suggested that many mints, banks and brokerages didn't have the silver they supposedly held for customers. Big companies like Morgan Stanley admitted in court that was true. He predicted important price swings in silver, uncovered the big short position on the COMEX, forecast that a boom in investment demand for silver would be forthcoming and now predicts a shortage in silver that appears to be unfolding. Recently Ted Butler said, "Silver is the best thing that you can own and now is the best time to buy it." I know he is the world's foremost silver genius because he has been first with every new and original thought on silver. When he says to buy silver now, it's time to listen. When he says it's the best thing in the world to own that's a powerful endorsement and you should follow his advice like you would any other genius. | ||
March 22, 2013
What will actually happen if Cyprus deal fails?
With a Monday deadline looming for Cyprus to agree with the European Union and the International Monetary Fund on a bailout deal, all eyes rest on the struggling nation ahead of the weekend. Lawmakers are scrambling to come up with the best terms to avoid a financial meltdown and while most market participants forecast a done deal over the next few days, there are still risks that no agreement will come through. It is the euro zone after all — it's not like the region has the greatest record of meeting crucial deadlines when it comes to solving its debt crisis.
So, what will actually happen if the sun rises in the Mediterranean on Monday and no agreement exits? Commerzbank has broken it down, step by step:
"Without a rescue package the government of Cyprus would default and could not pay for the urgently necessary re-capitalization of the country's banks," Commerzbank analysts wrote.
Reuters
This would prevent the European Central Bank from lending money to the insolvent banking system and the banks in Cyprus would receive no further liquidity from the Emergency Liquidity Assistance.
In that case, Cyprus citizens would run on the banks to get as much cash as possible, causing the banks to run out of funds, become illiquid and fail.
"Since a modern economy does not work without a payment system, the government in this scenario would probably be forced to abolish the euro as a legal tender and introduce a currency of its own. Then, the central bank of Cyprus would be able to provide banks with liquidity which is a pre-condition to get the banking system and the real economy moving again," the Commerzbank analysts said.
This would, however, have serious consequences for the Cypriot economy.
The new currency would rapidly depreciate and as government debt is denominated in euros, the debt pile would rise in the new currency, eventually leading to an unavoidable debt re-scheduling.
And what would this for other euro-zone countries? Not a whole lot. Read: Euro gains ground as Cyprus scrambles
"Investors would in all likelihood be able to cope even with a default on the €14bn of Cypriot government debt, €2.5bn of which are owned by the Russian government. The Greek debt cut cost investors €100bn after all," the analysts said.
It could, however, lead to worries that other countries could leave the euro zone, potentially adding pressure on government bonds in other struggling economies. But Commerzbank bank argues this fear is overblown.
"For one, Cyprus is a special case with its banking system bloated beyond all proportions and lax money laundering laws. Secondly, the ECB has a powerful instrument with its [outright monetary transaction] program to calm investors' nerves."
European stock markets were little changed ahead of the Monday deadline.
Darrell Delamaide's Political Capital
March 21, 2013
Euro may be doomed whether Cyprus stays or goes
No one can now trust Brussels, or Berlin
By Darrell Delamaide
WASHINGTON (MarketWatch) — However the crisis in Cyprus is resolved, there will be lasting effects on the European Union that may well have sealed the fate of the euro (ICAPC:EURUSD) .
After a brief respite with the markets focused on the U.S. Federal Reserve's monetary policy meeting, the crisis returned to the forefront when the European Central Bank set a deadline of Monday to agree on a rescue for Cypriot banks or it would withdraw its liquidity support for them.
The rejection of a bailout requiring a tax on deposits by the Cyprus Parliament and failure to reach a new agreement forced the government to extend a bank holiday through the rest of this week.
Michael Casey reports on the European Central Bank's Monday deadline for Cyprus, jobless claims and a global markets preview. Photo: Getty Images.
Whether Cyprus manages to agree on a rescue and stay in the euro or not, however, this week has left a legacy that will continue to have an impact on the EU and its currency.
First of all, Europeans have learned that not even deposit insurance — the bedrock on which confidence in banks rests — is sacrosanct in the minds of Brussels officials.
No amount of declarations that Cyprus is unique will restore the trust in their banks for Italians or Spaniards or Portuguese when the crisis again reaches an acute phase in their countries, as it inevitably will.
Second, the willingness of Cypriot lawmakers to defy Brussels and vote down their proposal sets a precedent that will rally anti-austerity and anti-euro forces throughout southern Europe.
Mainstream parties in Greece and Italy and Spain that have toed the Brussels' line will have to stiffen their spines or see their support eroded even further.
Most important, though, is that southern Europeans now have the clearest evidence so far that certain northern European countries view them as second-class citizens.
The small savers and pensioners that officials from Germany, the Netherlands, Finland and other countries were willing to penalize for the excesses of Cypriot banks are no guiltier of malfeasance than the small savers and pensioners in any of those northern European countries.
Reuters Enlarge Image
Protesters rally outside the Parliament in Nicosia, Cyprus.
It is impossible to imagine that politicians in Germany, for instance, would dare to confiscate nearly 7% of the savings of their own citizens for any reason. But they were willing to do it to Cypriots.
"What we are witnessing is the slow death of the European Project," Anthanasios Orphanides, the former head of Cyprus's central bank, said in an interview with Bloomberg TV this week. "We are in a situation that some European governments are essentially taking actions that are telling citizens of other member states that they are not equal under the law."
Orphanides, who worked as an economist at the U.S. Federal Reserve before his stint as central bank governor from 2007 to 2012 and who currently teaches at MIT, added that the Cyprus proposal endangered the banking union seen as necessary to preserve the euro by undermining confidence in deposit insurance.
"Indeed by making a mockery of that right now, the governments who pushed for this measure are sending a message that they want no part of a banking union," Orphanides said.
The one political leader in Europe who had a chance in Cyprus, as in earlier turning points, to put things on a more solid footing and ultimately ensure the sense of solidarity needed to support a genuine European union is German Chancellor Angela Merkel.
But in following the dictates of domestic public opinion, Merkel has shown once again that, contrary to her declaration she would do everything to support the euro, the most important thing for her is winning re-election to a third term.
She may indeed win a third term in Germany's national elections in September, and history will note the longevity of her tenure while giving her the lion's share of the blame for the disintegration of the EU.
The whole basis for European integration after two destructive wars was to co-opt the powerful German economy into a shared prosperity.
Merkel's short-sighted policies to shield Germany from taking responsibility for problems in a system Berlin largely designed and operated has resulted instead in a whole new generation of Europeans — for whom the wars of the 20th century are history — coming to distrust and resent the Germans once again.
Cyprus is a small country and whether it stays in the euro or instead becomes a full-fledged financial colony of Russia may not matter to a lot of people, but the way Brussels and Berlin have handled this crisis will matter to Europeans and financial markets for some time to come.
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