What The Greek Fiasco Is Teaching Us About Gold, Silver and Bitcoin

Greece has provided us with an excellent real-life monetary experiment in the past week. The price action in gold, silver and bitcoin is illuminating to say the least.

Greek banks are now shuttered with no end in sight. If we watch the movement of non central banking money, we have the opportunity to observe how they act under fairly severe stress.

In Cyprus in 2013,  banks closures and bank bail-ins resembled what is occurring in Greece and we saw a similar pattern.  Gold and silver languished; bitcoin skyrocketed.

GOLD/SILVER

Most would think that during a currency crisis like this one – threatening the very euro itself – gold and silver would skyrocket. They didn’t.  In fact gold is near lows not seen since early 2010.

And silver fell today to levels not seen since 2009.

This is very peculiar given that gold and silver coins have become quite scarce now due to demand. In fact in places like India, tons of gold are smuggled in yearly. The demand, it would seem, is a good deal greater than the supply.

Last week, the UK Royal Mint said, “During June, we experienced twice the expected demand for Sovereign bullion coins from our customers based in Greece.”

Many other dealers have been reporting the same.  Daniel Marburger, a director of Frankfurt-based CoinInvest.com, said “Most of our common gold coins are sold out.”

BullionVault, which operates the largest online physical gold trading and storage platform (and which we recommend – click here to check out their service), reported a jump in sales during the first half of this year.

Just today, the US Mint announced that it is sold out of Silver Eagles and is suspending sales as a result of a spike in demand. Something just doesn’t seem right here.

Zerohedge posted the following chart of Citigroup precious metals derivatives exposure.

Their exposure has risen more than 1,000% since the start of the year… that may have something to do with it!

BITCOIN

Meanwhile, there is bitcoin. Bitcoin has done what you would expect in a time of currency crisis… gone up.

In the past month bitcoin has risen from below $230 to a peak over $270 a few days ago for a gain of about 17%.

Demand is up, as it is with gold and siver. The difference is that Citibank cannot manipulate it as easily via derivatives.

Thanos Marinos, the founder of Greek bitcoin exchange BTCGreece, said he has seen the number of newly registered customers in the country increase by 600 per cent in the past few weeks. In the last seven days more than 150 clients have registered every day, he said.

And, slowly, the banking sector is catching on to the possibility that bitcoin could destroy the entire monetary and financial system.

In an article by Business Insider entitled, “One of the world’s biggest banks just admitted bitcoin could destroy existing finance firms“, Johann Palychata, an analyst at French bank BNP Paribas says the technology underpinning bitcoin has the potential to make existing companies “redundant.”

He went on to say the blockchain, the system that underpins bitcoin, “should be considered as an invention like the steam or combustion engine.”

We’ve been saying this for years, since bitcoin was at $3. We even recently featured a new blockchain securities company for TDV subscribers (subscribe here) that could make stock markets obsolete.

CONCLUSION

Those who hold gold and silver should have no fear about the recent decline.  It could well be a final push to get  the public out of the precious metals prior to autumn volatility sending yellow and white metals up hard.

All it will take is a couple of perfectly predictable disasters in the fall and it will be next to impossible to buy precious metals for fiat currency of any color, no matter which dead criminal is painted on it.

We’ve been telling subscribers to watch out for an Autumn surprise, or several  of them. We’ll be releasing more on our expectations fairly soon.

If you own gold or silver, make sure your precious metals are internationally diversified.  We wouldn’t be surprised by capital controls, bank closures and even the outlawing of precious metals owernship, just as happened nearly 100 years ago when the financial system was under similar stress.

You’ll want to hold your metals in a number of different jurisdictions for safety.  We have written Getting Your Gold Out Of Dodge as a guide to how to do so (it is also available for free to TDV subscribers).

And if you don’t own precious metals, saying now is the time to buy is likely the understatement of the year.

As for bitcoin: Imagine if many of the people of Greece had already begun to convert euros into bitcoin prior to this crisis.  All of the edicts and threats of the IMF would fall on deaf ears. People wouldn’t care about bank closures as they would have had most of their assets in precious metals and held bitcoin to transact easily and without capital controls.

Save in gold. Transact (and speculate) in bitcoin.

Sadly they were not prepared, but you can be.  If you haven’t looked into purchasing and using bitcoin, do so now to limit your exposure to the teetering “mainstream” financial and monetary system.

We know what we’re talking about. Our predictions and track record of success is well known. TDV is easily the biggest financial newsletter covering bitcoin since 2011.  Most others are either too ignorant of the workings of bitcoin or too scared to be so bold as we are.  But in times like this you must be bold to survive and prosper through The End Of The Monetary System As We Know It (TEOTMSAWKI).

By the time a Greek-style crisis comes to your country, the price of bitcoin will likely be much, much higher due to demand and a limited ability of the financial elites to manipulate it as they obviously do gold and silver.

Now is the time to buy.

Thoughts on gold/silver manipulation or on bitcoin?  Comment here.

Originally Appeared At The Dollar Vigilante