Posted on 07/21/2011 12:35:54 PM PDT by SeekAndFind
Print. Lie. Borrow. Deceive. Deny. These are a the principal tenants of the Greek restructuring plan that were released today from Brussels… it’s as if EU policymakers put it together after shaking a Magic 8-ball.
The whole world knows that Greece is bankrupt and has been living bailout to bailout for over a year. Deep in debt and devoid of cash, the country has completely forsaken its sovereignty in exchange for becoming a ward of the European Union; Prime Minister George Papandreou is now a hapless stooge awaiting instructions from Germany.
It’s ironic that the Greek proposal released today calls for a ‘Marshall Plan’ of investment across Europe… given that the last time Greece was being controlled by Germany was during the country’s occupation by Nazi forces after being vanquished by Hitler’s 12th Army in April 1941.
And so, with limited debate and even less fanfare, Europe has just officially signed on to destroy its own currency. Utterly worthless, quasi-defaulted Greek debt will become perfectly acceptable collateral, much in the same way that the US Federal Reserve took every scrap of toxic paper it could find off banks in 2008 and 2009.
Given the favorable market reaction, European politicians must be feeling pretty proud of themselves. The euro is up. The stock market is up. Oil is up. Well, never mind about oil, they’ll blame that on evil speculators… just like food prices.
And the proposal is so deliberately vague, they can go back home and tell constituents whatever they want. Angela Merkel can tell German voters that the French are paying for it, and Sarkozy and tell French voters that the Germans are paying for it. Win, win!
The European sovereign default SOP has just been set. When Spain, Italy, Portugal, and Ireland’s time of insolvency arrives, it will be handled just like this: Print. Lie. Borrow. Deceive. Deny.
Every day it becomes more and more obvious that the financial system as we know it is breaking down. The United States and European monetary union, whose currencies comprise nearly the entirety of the world’s fiat reserves, have both signed up to debase their currencies as rapidly as possible.
This is going to kick inflation up another notch as anyone holding on to Greek debt is going to trade out of it as quickly as possible. All that money has to go somewhere… and it’s a sure bet that a lot of it will feed rising commodities price (which translates into more inflation).
If you haven’t found a safe haven for your savings yet, it’s time to start. Now. No more excuses. A few you could consider:
Swiss franc, Norwegian krone, Singapore dollar, Chilean peso: These four currencies are generally regarded as safer, stronger, and managed by less obtuse central banks. In a world of fiat, these are among the least worst of the bunch.
Unidad de Fomento (UF): This is a special unit of account used in Chile that was set up during the hyperinflation days of the 1960s. The UF is designed to keep pace with inflation and it’s possible to establish a bank account denominated in UF in Chile. I’ll be telling SMC members how to do that in an upcoming issue.
Agricultural Property: Nothing hedges your risk against rising food prices like being able to produce your own food. This idea underpins the concept for the resilient community we’re planning in South America.
Precious Metals: Portable, divisible, durable, and scarce, precious metals are the classic hedge against rising prices. Gold and silver aren’t going to go up in a straight line, and gold in particular is due for a correction, but in a world ruled by an economic magic 8-ball, it’s a much safer store of value than a government IOU.
High quality equities: If my only two options are Apple stock and a bank account earning 0% interest, I’m going with Steve Jobs. The chief problem with equities is that the more money that central banks print, the more money flows into equities… pushing valuations up to dizzying (and unsustainable) levels.
Firearms and ammunition: Weapons and ammo serve a dual purpose of providing better home security, as well as a reasonable store of value. Unfortunately, they can also serve a third purpose– putting you on some government agency’s radar.
This list is by no means exhaustive… but if you have the majority of your savings just sitting there wasting away, it’s time to act.
BTTT
Yeah, let me just crap $1600 for an ounce. I have that lying around the house. s/
So we should throw our savings into a precious medal that due for a correction? Forgive me if I don’t do that...or dump it into Chilean pesos, lol.
“This idea underpins the concept for the resilient community we’re planning in South America.”
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Galt’s Gulch?
Who is this “we”?
No, you should have been forward thinking and bought some physical gold and silver in the past few years. Then you could feel fairly happy with the appreciation of that portion of your assets. YMMV.
The proverbial rock and a hard place is coming. Just looking for a way to move sideways.
Maybe some silver then?
Price discovery in the Precious Metals is going to become keener once the HKMEX starts selling silver (i.e. tomorrow). The COMEX’s paper version of silver isn’t going to cut it for much longer. Seems like a good time to buy.
I just think it’s all hype. If there’s a true global financial crash, the gold won’t do you much good either...you can’t eat it.
Heard that was demonstrated in late-WWII Japan: knowing the mainland would get hammered, people bought up gold. When it did, there was nothing (to wit bread) to buy with it.
No matter what the dollar drops to, Gold and Silver will still be the only real money. Isn’t is strange that Greece the First Republic, and the first country with a monetary system backed with Silver and Gold, 2,000 years ago. Today is the country taking all of Europe and the U.S. down with their 0 based fiat money
And isn’t it possible that should we have a financial meltdown, the feds just would confiscate gold like they did under FDR?
So we should throw our savings into a precious medal that due for a correction?
The day I buy gold with my savings, everyone should sell theirs because gold will take a dive the next day;) I guess I was meant to be one of those in the long food lines or foraging yucca roots and wild grasses.
BINGO!!!!
The Fed will take it all away if the dollar collapses and it will be illegal to use it for commerce... and those rats will do it... you just know that they will... they did it before and they would do it again in a heartbeat.
LLS
More than possible, likely - even though such an act would cause the 70% of USD holders who are foreigners to immediately dump the dollar. It’s still likely because Democrats are not like normal folks.
FDR’s reign of terror managed to snag Gold left in safety deposit boxes (and also freely-surrendered Gold). The thing to do is make sure that your precious metals are not stored anywhere the Government can easily control/gain access to them.
“Today is the country taking all of Europe and the U.S. down with their 0 based fiat money.”
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Greece may be the problem today, but they are just the trivial opening act for the big show, which is the long overdue comeuppance of the American economy.
considering you can’t spell “metal”, I will take your recommendation with a grain of salt. =)
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