5/10/10 Greece, The Euro Collapse And Gold

Precious Metals Market Analysis, By Michael Pennington (Copyright 2010 Pennco Coins)

After an emergency meeting this weekend, Central Banks around the world, including the US Fed, have agreed to a $645 Billion bailout for Greece. Every banker and politician held their collective noses when their plan was approved. Rating agencies have their bonds reduced to junk status and yet it was because of the bondholders that the bailout was implemented. IMO it’s a short term fix, maybe 6-12 months. The debt is too much to ever repay and other European nations are lining up outside the ECB, the FED and the IMF. Collapse of the Euro is inevitable. Gold has been setting record highs almost every day against the Euro (as well as most fiat

currencies. If you were holding Euros and watching your purchasing power evaporate by 50% over the past year, wouldn’t you start thinking about redirecting your money to Gold? Most wealthy Europeans have already done this and more are doing it every day. But there are still many people who just don’t “get it”.

Greece’s debt problems are about to spread to other countries and could infect the United States unless this country starts solving its own mounting debt problems. We’ve seen a crisis start in a country — Greece — become regional, impact the whole of the euro zone and is on the verge of truly going global. The system is slowly starting to have cascading failures.

The US is different because it has more time to solve its own problems simply because the dollar is the world’s reserve currency – for now. But what the Greek crisis tells us is debt and deficits matter. The structure of our deficits matter and the U.S. doesn’t have much flexibility. There are structural headwinds out there and we better get our act together before those structural headwinds become overwhelming.

The USG unfortunately is spending most of its time thinking of new ways to raise taxes to pay for programs that really help no one. I have an idea: CUT SPENDING! The Tea Party Movement has nothing to do with race, but about both Republican and Democrat wild spending, just like in Greece. All the spending over the decades since FDR, has given us and other nations, an underclass, which depends on the handouts, public housing, food stamps, and all sorts of government freebies, paid by us in the form of declining dollar value and outrageous taxes. It is nothing more than politicians pandering to the poor in exchange for their votes. Only 50% of US taxpayers cannot support all the funding programs of this government. We will soon be worse than Greece as a percentage of our debt to GDP. If you think it can’t happen here or in the UK you’re not paying attention.

Sooner, rather than later a hyper-inflation wave will hit us like a tsunami. It’s already out there gaining steam, but when it hits the global economy will suffer like never before. Be prepared by accumulating as much Gold and Silver as possible.

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