Tuesday, November 29, 2011

Only Days Til Europe Implodes?

I'd repost this article here, but the Financial Times has decided they don't want people reposting their stuff, even with correct attribution and citation. Annoying and hopelessly anachronistic, but nonetheless I'll accede to their wishes. Go to their website and read the article from the link below.

The Eurozone Really Has Only Days to Avoid Collapse

If and when Europe dies, they take the U.S. banking system (and probably good portions of the Asian banking system) with them. At least for awhile. Get ready. Cash in your pocket, food in your pantry, any necessary medications laid up in the medicine chest, and a full tank of gas are what is needed now.
The push now from within Europe is for an even more tightly integrated and controlled Europe. The Devil's plans... oops! I mean George Soros and his cronies' plans for the world require the various crises to force everyone into unions with less and less freedom. This whole thing is being done intentionally, using the dialectic process. The current crisis will serve to show that this way of doing things is unsustainable and the Powers That Be need more power and authority to control things and protect us. The sheep will bleat for safety and security and give it to them. The Powers That Be will take the new power and use it to create the next crisis. It's the product of more than a century of planning, and its end was completely forseeable by the architects of the current system and their critics. In his Essay, "Is Progress Possible: Willing Slaves of the Welfare State," C.S. Lewis wrote:
I believe a man is happier, and happy in a richer way, if he has 'the freeborn mind'. But I doubt whether he can have this without economic independence, which the new society is abolishing. For economic independence allows an education not controlled by Government; and in adult life it is the man who needs, and asks, nothing of Government who can criticise its acts and snap his fingers at its ideology. Read Montaigne; that's the voice of a man with his legs under his own table, eating the mutton and turnips raised on his own land. Who will talk like that when the State is everyone's schoolmaster and employer? Admittedly, when man was untamed, such liberty belonged only to the few. I know. Hence the horrible suspicion that our only choice is between societies with few freemen and societies with none.

Friday, November 25, 2011

Germany Can't Sell Its Bonds... The Collapse is Almost Here

It's all falling apart, folks.  Get ready.  Germany tried to auction some of its sovereign debt today.  These would be the German equivalent of the 10 year U.S. Treasury Bond.  Germany is one of the strongest economies on the planet, and it is certainly the strongest economy in the Eurozone.  Basically it's Germany's deep pockets that have kept the Euro from imploding.  Everyone was looking to Germany to backstop their plays and bail out the rest of Europe.

The Germans were only able to sell about 2/3 of their bond offerings at auction today.  Bond buyers do not want German debt.  This is unprecedented.  And bad.  Very, very bad.

If the bond buyers don't want German sovereign debt, then they don't want the Euro, which means they don't want Europe at all.  Which means Europe collapses and disintegrates.  Which means the rest of the world goes down with it, thanks to our interconnected, derivative-happy world monetary system.

As one analyst said,

“This auction is nothing short of a disaster for Germany,” Mark Grant, a managing director at Southwest Securities Inc. in Fort Lauderdale,Florida, said by e-mail. “If the strongest nation in Europe has this kind of difficulty raising capital, one shudders concerning the upcoming auctions in other European nations.”

The deflationary collapse is happening right now.  Can the politicians and the banksters stop it?  It's extremely doubtful that they can put a temporary stop to it.  It's certain that they cannot put a permanent stop to it.

What will happen?

1.  Everyone will flee to the U.S. dollar.  Every other class of asset will plummet.  Gold and silver will get whacked pretty hard.  Stocks will plunge.  Bonds (other than U.S. Treasuries of a very, very short term maturity) will be worthless.  The only thing that's worth holding right now is cash.

2.  The whole banking system will be disrupted.  There will be bank holidays and banks going belly-up.  It's entirely possible that the FDIC's deposit insurance fund will be overwhelmed by demand for funds from the bad banks.  The ATM's will not work for awhile, and neither will your credit card.  You need to have cash money somewhere safe that you can get to it.

3.  There will be panic buying for necessities, and the transportation and distribution infrastructures will be disrupted at least temporarily.  We've been here before, in 2008.  The whole system almost came tumbling down.  It was within hours of doing so.  The government suddenly found itself in the midst of trying to figure out how to feed several million people.  Hopefully they've learned from that experience and are ready this time, but you cannot count on it.  One thing is for sure.  New York City will get help before Western South Dakota (and places like it) do.  So keep your gas tank full.  Keep some fuel in your gas cans in the garage.  Have some non-perishable staples on the pantry shelf.

Now is not the time to play around with your family's wellbeing.  And really, what's the downside if I'm wrong?  Put the gas from the gas cans in your car, drive to the bank and redeposit your money, and then go home and eat the canned green beans.

Now, this probably all seems A) a bit surreal and unbelievable, and B) quite frightening.  Sorry, there's not much I can do about the surreal and unbelievable part.  If you've never experienced something it's pretty difficult to avoid that surreal and unbelievable feeling.  However this sort of thing has happened before.  It happened to the whole world in the 1930's.  It's happened in various countries around the world.

Which leads me to the quite frightening part. This is not the end of the world.  We will get through this.  There will be discomfort, and adjustments, but we will get through this, and things will be better again someday.  This is the time for neighbors to band together and help each other.

Most of all, it's a time to trust God.

Sunday, November 20, 2011

Watch the European Bond Rates

The Bond Vigilantes are running riot through Europe, and countries besides the PIIGS are suddenly seeing their borrowing costs rise.  France and Finland have had very dramatic rises in borrowing costs.  The Netherlands is next, it seems, along with Belgium.

The powers that be in Europe are saying "more Europe is what we need, not less."  Yes, give the banksters in Brussels more power to print money.  That will fix everything.  It is doubtful whether the common people will accept "more Europe."  But what the common people want in Greece hasn't seem to matter to these folks, so maybe they will continue with that theme.

When Europe implodes, that will bring a worldwide stock market and banking collapse, along with deflationary forces.  Get ready.  It's coming.  It's probably 8 weeks away (let's get ourselves past Christmas before we blow up the world!)

The deflation will be severe, but relatively brief.  It will create the political will to create massive amounts of money.  Then we will have a great inflation in earnest.  Nimbleness is what is called for here.  You want cash and cash equivalents right now.  A well stocked pantry wouldn't hurt either.  Your bank could well be closed for several weeks "restructuring."  Keep gas in a gas can in the shed and keep the car full.  If you have firearms, load and ready them.

It's probably not going to be very nice, but you can tell your grandkids about  it.

It's coming.

Wednesday, November 9, 2011

When the Wheels Come Off In Europe

Just a quick post this evening.  The Greek Contagion is beginning to spread in earnest.  Sooner or later the wheels are going to fall off in Europe.  When they do, it will be like 2008, only magnified.  Prepare for every kind of asset to get whacked hard, with the only exceptions being the dollar and US Treasuries.  Today the 30 year Treasury was bid up sharply, as investors fled to the "safe haven" of U.S. Government debt.

Batten down the hatches.  The storm is here.