Australian banks given one week to prepare for European meltdown

This week:

+ Gold below $2100NZ

+ Is now a good time to buy silver bullion?

+ More on re-hypothecation

+ Australian banks given one week to prepare for European meltdown

Gold below $2100NZ

Well we’ve seen significant drops in the price of both gold and silver this past week.  Gold has been below $2100NZ this week for the first time since late October.  As you can see in the chart below it is approaching our old friend the 200 day moving average which as we’ve mentioned many times before is often a good buying zone for the long term.

Click image to enlarge

Is now a good time to buy silver bullion?

But silver in NZ dollars is at even lower levels this week.  And so yesterday we wrote an article specifically looking at whether now might be a good time to buy silver bullion with NZ dollars.  So if you’ve been mulling over a silver purchase that might be worth checking out…

Silver Bullion: Is now a good time to buy?

As usual all writings are just our opinions and not intended as financial advice, take from them what you will!

More on re-hypothecation

Other articles this week include more on that word re-hypothecation.  Following on from our comments on it last week, Casey Research have put together a full account on the re-hypothecation topic.

There’s also a look at just what is the situation with world gold supply.  With actual numbers rather than just ramblings about shortages.

As usual links and intro paragraphs to the articles are at the end of this email too.

Australian banks given one week to prepare for European meltdown

After our recent article on the Reserve Banks plans in case of an NZ bank failure,  reader R.W. forwarded us on the below article at the end of last week:

Australian banks given one week to prepare for European meltdown

The article states that Australian banks have been given 1 week by the Australian Prudential Regulator Authority (APRA) to…

”…model the impact of a worst-case scenario resulting in contraction in gross domestic product, an unemployment rate of 12 per cent, as well as a 30 per cent decline in house prices and a 40 per cent drop in commercial property values.”

That sure sounds like a pretty bad scenario to test for.  Although then a couple days later the report had some cold water poured on it when the Chairman of ANZ said…

“We’re not aware of any requests from APRA to complete a review on that basis within a week,” Mr Morschel said at the company’s annual general meeting in Sydney.

“We are aware that APRA continually asks us to stress-test our portfolio for various economic scenarios.”

Mr Morschel said that an APRA review is currently ongoing and that ANZ has until March to present information.”

That seems like a very specific set of circumstances to have made up though.  The skeptic in us did think the fact the ANZ Chairman said “We’re not aware of any requests from APRA to complete a review on that basis within a week,” could mean the report just got the timeframe wrong but maybe not the scenario?

So who knows?  Whether true or not it’s just further evidence of the precarious nature of the financial system and the need for some “financial insurance” in our opinion.

With only 2 days left after today before the Christmas break (meaning we won’t have access to 2 of our suppliers until Monday 9th), and prices down in both metals, now might be as good a time as any to buy we’re thinking.  But if you get the urge to buy over the holidays we’ll still be just a phone call or email away.

If you’d like a specific quote give David a all on 0800 888 465 or email orders@goldsurvivalguide.co.nz.

We’d like to wish a Merry Christmas and happy holidays to you and your family.  We intend to have an article updates email during the break depending on how much there is to report on.

Here’s to some “golden” summer weather we hope.

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