En route to San Diego, and following this morning’s news made a last second change to my RANT topic. I was going to eviscerate the only person with as much “financial blood” on his hands as Alan Greenspan – “Quivering Lip” Bernanke – but that will have to wait for another day. Perusing Zero Hedge, I came across the following article about Portugal, “the next country to follow Greece out of Valhalla and down to Hades’ gate.”
I always enjoy literary references, and Greek mythology is my favorite – particularly when speaking of Greece. However, this article relates the sad saga of the PIIGS, even sadder given the same problems are present in perhaps three-quarters of the world’s nations, cumulatively accounting for 99% of global GDP.
What initially drew my ire was the same “fuzzy logic” – i.e. LIES – about debt ratios that have become prevalent in ALL aspects of society since the turn of the century, involving corporations, municipalities, and sovereign nations alike. Starting in 2002 with Enron, its accountants Arthur Anderson and bankers JP Morgan, the culture of flat out LYING about finances has become pandemic, and sadly will dramatically worsen until the GLOBAL financial system collapses.
I’d ask why it has become so difficult to tell the truth, but we all know the answer. The cancer that is the global fiat currency system has infected generations of bankers, politicians, and executive with no concept of financial prudence, and – frankly – scant understanding of the laws of basic human decency. The unchecked expansion of MONEY PRINTING has grown so enormous; it has effectively destroyed the world as we know it, likely for generations to come.
Like the movie Fargo – referenced numerous times in past RANTS – the scope of financial crime has broadened so significantly that for many, the ONLY choice is to lie, and pray for “an absolution that never comes.” As for Central Bankers, they KNOW they have disemboweled their nations – and many others – and thus, have resorted to the most dastardly of economic cowardice – FABRICATION of financial data, OBFUSCATION of truth, and PROPAGANDA to misdirect the populace from their true actions and intentions.
I don’t need to rehash TPTB’s attempt to paper over the Greek DEFAULT with such tools, or the immutable truth that what they have done will spectacularly backfire, likely sooner rather than later. Greece’s 180% debt/GDP increased following its “bailout,” which did nothing more than roll forward its current debt and add new tranches – replete with lethal “austerity” measures designed to fail, enabling the ECB bankers to steal Greece’s remaining assets, such as its 111 tonnes of gold. Couple these “poison pills” with 25%+ unemployment, GDP contracting at FREEFALL speed (-7.5% last quarter), widespread social unrest, ongoing bank runs, and next month’s national elections, and my forecast of Greece reneging on this deal and leaving the Euro by year-end looks pretty astute.
When that happens, we will see continent-wide bank runs of epic proportions, particularly in the PIIGS nations next in line for execution. Greece will be forced to utilize a massively devalued drachma, and subsequently will be viewed as an economic leper by the rest of Europe. Greece already has the highest gasoline prices on the continent, and with the “new drachma” – which its new, unstable government will have the ability to print AT WILL – hyperinflation will immediately swamp the once-great nation. And then, it will be Portugal’s turn…
Per the opening commentary, Portugal, too, has “official” economic data not even close to reality. Its “master” the ECB states Portugal’s debt/GDP ratio at 111% – itself a level capable of destroying most nations – but the reality is far, far worse. Per the below data, total debt is $346 billion, compared to $208 billion of GDP (assuming that data is not fabricated), for a debt to GDP ratio of 166%. Even this article – whose point is to highlight that 111% is heavily understated – calls this ratio 140%; but as a 20-year, CFA-bearing financial analyst, my math says 166%, putting it squarely in Greece’s camp. It too, is experiencing plummeting economic activity, debilitating unemployment, and a bursting real estate bubble, with double-digit sovereign debt yields and soaring CDS prices. Not to mention, later this Spring it – like Greece – has a debt principal payment with not a chance in hell of being funded; hence, GREECE II.
Total GDP $208 billion
Short Term Debt $ 99 billion
Long Term Debt $ 96 billion
Troika Loan $111 billion
Government Guaranteed Debt $ 16 billion
Government Guaranteed Bank Loans $ 24 billion
Debt to GDP Ratio 140%
The article also discusses the more than €1 TRILLION of LTRO, or Long-Term Refinancing Operation “loans” given in November and February to more than 800 European banks to recapitalize their balance sheets – ALL of which has been re-deposited into the ECB to protect their zombie balance sheets. The topic of this RANT is “fuzzy logic,” and no logic is fuzzier than the belief that lending more money to bankrupt companies will somehow mend their balance sheets, particularly amidst a GLOBAL recession not experienced since the 1930s. These “loans” are designed to be rolled indefinitely at sub-1% interest rates; in other words, taxpayer-funded bailouts. Of course, such bailouts are “funded” solely by MONEY PRINTING (as tax receipts are plummeting worldwide); thus, in essence, the “tax” is INFLATION. Hence, this month’s ALL-TIME HIGH GLOBAL GASOLINE PRICES.
Yes, the “LTRO,” which together with its sister cancer on this side of the pond – the Fed’s “swap facility” – is executing the largest, most coordinated GLOBAL QE program of all-time – not including MASSIVE QE programs in other major nations such as China, Japan, and the UK (although I’m reluctant to call the UK “major”). Think about it – a program that just added $1.3 TRILLION of debt to a continent amidst a comprehensive debt COLLAPSE, and we are told this is go0d?
Ah, the power of the PPT/QE/Cartel to prop up stocks and bonds while suppressing PAPER PM prices, hoping and praying for that non-existent absolution. How much longer will the game go on before the system blows sky high? No one knows for sure, but I ASSURE you it will – and it won’t take “a few years” to detonate, as TPTB hope and most commentators assume.
Aside from a “black swan event” – or better yet, the “not-so-black swan” of Middle East WAR – I believe the catalyst will be the U.S. economy, desperately propped by TPTB to maintain confidence in the currency supporting all others – the U.S. dollar. From the maniacal daily attacks on PAPER gold and silver, to the PROPAGANDA of “recovery,” to flat-out FABRICATIONS of economic statistics like the NFP employment data, “Plan A” is being carried out with all the subtlety of a bull in a China shop. I don’t believe even they expect it to succeed, which is why – with each passing day – my sense of dread of what “Plan B” entails, whatever that may be, grows stronger.
Election fraud, the National Defense Authorization Act, the National Resources Preparedness Act, and other blatant thefts of basic rights and liberties make me fearful of what is to come, particularly with the WAR DRUMS beating so loudly. I see lies, propaganda, poverty, social unrest, and the rise of lunatics like Rick Santorum – he who wants to ban pornography – and realize “something wicked this way comes.” Fiat currency is the cause, fraudulent accounting a symptom, and inevitable war, economic collapse, and hyperinflation the ultimate outcome.
PROTECT YOURSELF, and do it NOW!