Originally Posted by sactoller
God I hope they let it fail!


Be careful what you wish for, as four of our largest banks hold multi trillions worth of CDS contracts. If they-Greece-does default, and I mean a formal hard default, then there's no way that the ISDA can rule that a default didn't happen. If that's the case you have a reprise of AIG, only on a much grander scale.

As to it's effect on gold, the question you have to ask is what is your counterparty risk? If the ISDA rules that Greece's default isn't really a default, or that some of the bonds issued under English Law have seniority over those issued under Greek Law, then you have a defacto abrogation of bond holder's rights, and ALL paper is questionable, no matter the issuer-including US Treasury paper.

Gold has no counterparty-IF you hold physical in possession.

There is nothing safer or better for preserving wealth, especially in these times of moving definitions and thievery being done under the auspices of sovereign central banks and their commercial offspring.

Last edited by mike762; 02/19/12.

If the American People allow private banks to control the issuance of their currency, first by inflation, then by deflation, the banks..., will deprive the People of all their Property,...Thomas Jefferson