Caesar Bryan - Continued Bank Runs In Europe, Battle Lines Drawn & Gold

Just to get back to the traditionally undervalued point for the mining shares, it would require a doubling of the value of the equities that comprise the XAU.  The chart below shows the dramatic underperformance of the gold shares vs the gold price for the last 7+ years:

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[On the subject of Europe ... ] we have these battle lines being drawn between those who are very nervous, such as the Bundesbank about bond buying being too close to state financing, and those in the other camp who believe the monetary mechanism in Europe has broken down.  The second camp believes there needs to be significant bond buying by the ECB.

The second camp now has the momentum and this will be extremely positive for gold.  It may actually be positive for the euro as well.  One risk here for the euro is that they will do a half-hearted intervention.  Meanwhile you have a situation where central banks continue to add to gold.