Economic Collapse

As expected the Euro is breaking up. This is the first sign and the beginning of the end of the Euro as France and Germany discuss breaking away from the PIIGS:
http://www.telegraph.co.uk/news/worldnews/europe/7837874/Germany-and-France-examine-two-tier-euro.html

Just came back from the pre-premiere of a Swedish-made movie called “Overdose - The Next Financial Crisis“. It’s narrated by Cato Institute affiliate and free-lance writer Johan Norberg and the movie is also based on one of his books. I must say the movie portrays the dire mess we are in, in a manner that’s very easily grasped. This makes it a very good movie to share with your friends if you find it difficult to get people close to you to listen to boring financial lingo. Highly recommended! The film features trend forecaster Gerald Celente, investor Peter Schiff and many others.

For everyone in Washington D.C., the Cato Institute is screening the film on the 17:th of May 2010.
Facebook group is also available.

- Jim Sinclair, March 7th 2010:

What is the difference between the State of California and the State of Greece? The State of California is a bigger bankruptcy… The financial industry is at war with Greece. The CDS-attack (Credit Default Swaps, an off-the-counter derivative) is a nuclear financial attack on Greece.

Very interesting two-part interview with the legendary Jim Sinclair of JSMineSet.com by King World News. Listen to this amazing interview: part 1 and part 2.

In part 2, Jim Sinclair talks about Quantitative Easing, hyperinflation and the coming One World Currency of the IMF and a de facto financial One World Government.

The interview ends with Jim Sinclair concluding:

“Be prepared! This is a great civilization change. The most positive thing you can do is to recognize what is out there. The greatest contribution you can make to your family is to be prepared. So when all of this happens, you already have things in place: plans as of what you can do.
…We are not trying to scare anybody or trying to sell anything. We are simply saying, this is the hand writing on the wall. This is what’s most likely going to happen. In order to prepare you have to look at your financial and physical situation. You have to se weather or not this is a really great and significant shift in world history.
…The entire purpose of all this is preparation, because the truth will set us free.”

That last statement is at the core of why I have this blog. The world is changing. If you want to protect the purchasing power of your savings from the devaluation of the printing press - buy gold. If you want to stimulate your mind and stay a head of the game, keep reading, listening and watching. Stay tuned…

Today Bloomberg quoted Romano Prodi, the former European Commission President and the former Italian prime minister:

“For Greece, the problem is completely over.”
“I don’t see any other case now in Europe. I don’t think there is any reason to think the euro system will collapse or will suffer greatly because of Greece.”

So yesterday everyone was concerned about the huge soverign debt of Greece, Portugal, Spain, Italy etc, and today the problem is gone? I advise you, dear reader, to read between the line and consider this as Orwellian doublespeak. This is what Jim Sinclair calls MOPE, Management of Perception Economics. This statement is to me the best evidence to date of the seriousness of the Greek cricis.

“When a government is dependent upon bankers for money, they and not the leaders of the government control the situation, since the hand that gives is above the hand that takes… Money has no motherland; financiers are without patriotism and without decency; their sole object is gain.”
– Napoleon Bonaparte, 1815

Powerful article on sovereign debt and gold. Here’s a quote:

Wherever we look at the world economy today, we see a wall of risk…and potential financial catastrophe. We see a large number of virtually bankrupt major sovereign states (US, UK, Spain, Italy, Greece, Japan and many more) teetering atop a financial system that is bankrupt, but is temporarily kept alive with phony valuations and unlimited money printing. Increasingly, therefore, investors will want to exchange this funny money for gold.

Here is a great article by Bill Bonner on the state of debt of governments sent out today to Daily Reckoning subscribers.
Read the rest of this entry »

Paul Tustain, founder & CEO of BullionVault.com just put out this talk in writing. He has been touring Asia talking to investment professionals in Tokyo, Singapore and Hong Kong. It’s a very well written talk and gives you a comprehensive overview of what might be coming our way. Download the 12 page PDF here. He talks about US consumers and what an increase in interest rates would entail for the tax burden:

The cost of a $20 trillion national debt costing 5% per annum in interest rates would
be $1 trillion, or $10,000 per annum in taxes per year for every American family, just to
pay the interest, i.e. before a single government service was delivered. That is the cost of
maintaining a $200,000 per family national debt.
The unavoidable conclusion is that, on-plan, the US cannot react appropriately to a
developing inflation problem. The G20 pronouncement that interest rates would stay
low for the foreseeable future was true. There is no alternative to permanently low
interest rates on these budget figures.

Read the rest of this entry »

A dire warning that the Republic is a prime candidate to go bust has come from one of the world’s leading economic historians.

“The idea that countries don’t go bust is a joke,” said Niall Ferguson, Harvard professor and author of The Ascent of Money.

“The debt trap may be about to spring” he said, “for countries that have created large stimulus packages in order to stimulate their economies.”

His chosen prime candidate to go bust is “Ireland, followed by Italy and Belgium, and UK is not too far behind”.

http://www.independent.co.uk/news/world/europe/ireland-set-to-go-bust-claims-economic-historian-1692673.html