the don creech show - Don Creech

Here's What Would Cause Gold To Dive 40% To 50%

Commodities guru Jim Rogers said he is not buying gold. In fact, he said he has "hedged himself" since we spoke to him last month. Rogers said he expects gold prices to fall further and believes they could tumble 40-50 percent off their top if India were to stop its gold imports or if Europeans were to sell their gold: "There's some movement in India to really curtail the purchase of gold. Some people in India say we should stop importing gold period which would be draconian. There are also Europeans who are talking about the need to sell their gold or at least to start offering gold backed-convertible bonds, bonds convertible into gold, which would be a way to free up their central bank holdings without dumping gold.

Economists warned that the Greek financial system could crumble within weeks or days unless the European Central Bank steps up support. President Karolos Papoulias told party leaders that banks had lost €700m in withdrawals on Monday alone as citizens rush to pre-empt capital controls and a much-feared return to the Drachma.

California Governor Jerry Brown released a revised state budget on Monday, calling for $8.3 billion in spending cuts in an attempt to address the state's $15.7 billion budget shortfall. The cuts will scale back work hours for public sector employees to reduce compensation by 5 percent. In addition, Brown's plan would slash the state's health care and welfare programs for low-income residents and the elderly by more than $1 billion.

JPMorgan's $2 billion-plus trading loss raises serious questions about whether the New York Federal Reserve and other regulators were asleep at the wheel or whether it is asking too much of them to keep up with the financial engineering conducted by complex institutions with diverse, global operations. The discussion may have migrated from too big to fail to too big to manage and too big to regulate.