Silver And The Euro

The Gold Basis Weekend Edition

Last Thursday, I touched on a theme of the silver-euro correlation. Clearly, the euro is heading to zero (not necessarily immediately, and not necessarily all at once) and clearly silver is not. This means that the correlation will eventually end, and silver will decouple from the euro to the upside, perhaps violently. As one mulls what could catalyze this event, and as one mulls the next logical move for the Euro leaders, one way this could happen becomes clear. I think this is the likely scenario.

The Futile Attempt to Save Creditors

The problem in Euroland on the monetary side is that the peripheral countries are drowning in debt that they cannot pay. No formula of "austerity" –tax increases plus spending cuts– can fix the problem.

Read more: SeekingAlpha.com, 31 August 2012