Being “Cyprussed” is probably on the table if the U.S. dollar eventually collapses. So what is left for the reasonable person who has worked hard and saved a few pennies? Not much, but silver is certainly high on the list as hedge against such a scenario.
Precious metal prices rose Tuesday morning in London, after the finance minister of Cyprus said selling some of the debt-laden Mediterranean island's gold reserves was "only an option" for raising cash.
The world's economy is in tatters and safe havens are few and far between, says legendary contrarian Marc Faber. The banking crisis in Cyprus has shown that even bank deposits are not safe. So where can a person park their money?
There has been a growing shift in favor of assets relative to bank deposits. This was initially encouraged by zero interest rates, but more recently there is little doubt that Cyprus’s bail-in has accelerated the trend.
The most puzzling part of the investment business is seeing how the vast and largely economically illiterate masses interpret any given piece of news. Take the recent gold sell off: Many large players were motivated to sell by news that Cyprus will have to liquidate its gold.
Wholesale market gold prices hovered around $1,380 an ounce Wednesday morning in London, little changed from a day earlier, as European stocks continues to fall along with most commodities and US Treasuries gained.