The Greeks, and by extension the Eurozone, received a temporary reprieve from financial calamity on Friday. The neo-marxists of Syriza may enjoy a temporary victory for a few months as financing measures kick in keeping the government liquid and functional. What will be more telling in the June to August time-frame is whether this was a band-aid to allow Greece to exit the Euro and transition to the Drachma or not.
The Euro common currency project is flawed and fragile. Its very core is hollow and prone to disruption as sovereign states like Greece and Portugal look after their own interests by borrowing sums that are impossible to repay to support their economies, while Germany enjoys an artificially low currency that allows its export machine to flourish.
In a sense, Germany has completed its domination of Europe as it has desired for all these years. Now, over the next few months, it will be telling to see whether this dream is a utopia or purgatory for the non-German members.
While we expect gold to provide lackluster performance until the crisis grows nearer, we remain mindful, that it remains the sole currency that is without counter party claims. In a fiat currency world, gold still shines as a beacon for those of us who refuse to believe the logical fallacy that a debt problem can be resolved with even more debt.