Tuesday, November 08, 2011
Commentary by Peter Morici, Ph.D.
Simply, private investors and other governments, notably cash-rich China and other big exporters, expect Italian and other European sovereign debt to fail. They are concerned the euro will simply implode all together, and then no European government will have both the resources and inclination to stand behind the ESFS's failing bonds.
At that point, nothing is left but gold. Now trading at $1790, it could zoom right past $2000 to $3000 an ounce.
Peter Morici is a professor at the Smith School of Business, University of Maryland School, and former Chief Economist at the U.S. International Trade Commission. LINK...