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Spain had a nearly $100 billion outflow from it’s banking system in just the month of July (Fears Rising, Spaniards Pull Out Their Cash and Get Out of Spain).  They have a 25% unemployment rate, a declining economy and the sovereign itself probably has less than 60 days before it goes total “Greek”.  This is a full fledged bank run in progress as their largest bank Dexia was bailed out last week.  The bailout of $7 billion or so merely plugged the hole created over the last 90 days, it has done nothing to stop the losses.  While speaking of losses, their real estate and housing sector makes ours here in the US look healthy which of course is another hole in their banking sector hull.  The “hope” is that the ECB (Germany) will step in and save them, who will save Germany?

The above is not really “new” news but it is exactly what was predicted.  It was “predicted” because it (as everything else financial) is basically a mathematical equation of logic.  Greece was logic as is Spain, Italy is logic as is France, as is the US.  My point?  This is global and it is systemic to the very core.  It is completely predictable as to “failure”.  The timing is not fixed nor is the exact path taken, but mathematically the “end” will arrive at default, non payment and new/changed currencies.

This is so easy to see as all central banks and sovereign treasuries are floating adrift in the middle of the sea of fiat.  As each banking sector or sovereign’s head goes below water, they are helped by those “stronger”.  But…for how long can the strong continue to tread water while holding the up weakest?  The problem…even if only one goes under and drowns, because they are chained to the rest, they ALL will go down and drown.  Again, this is not new thinking but it is here now and in your face obvious.

What is also obvious is that precious metals (real money) will be the one and only last man standing because they depend on nothing else for their value.  Yes, I know, CNBC has paraded their clowns again to tell you that the metals have broken out because of “QE” expectations on a global basis.  QE, no QE, whether it works or doesn’t work to buy some more time…it doesn’t matter.  The metals have value because they “are”, not because they are “legislated” value.  In fact, the precious metals will attain their highest relative values if the entire system collapsed in what would be called a deflationary heap.  Inflation, deflation, it does not matter, the precious metals have only one way to go in the long term.

The direction is toward more “relative” value versus anything and everything including food.  I say this because the old saying goes…”you can’t eat Gold” and all non holders rebut with this all the time.  No, you can’t eat Gold but you can surely purchase someone’s surplus food with Gold or Silver when nothing else spends.  There by definition MUST be a “money” or a “currency” to transact trade or business with, whether the paper currencies are printed into oblivion or the banking system implodes into oblivion, it will not matter as the current paper monies will either not be accepted, not available or most likely not accepted when they do become available.

The metals are just now beginning to “speak”.  Roughly 1% of Americans even own precious metals.  At best only 25% of these truly understand the metals.  The other 75% are thinking now, “oh goodie goodie, Gold and Silver are going up and I’m making money.”  Not true.  When the metals go to new “fiat highs,” this will be a signal, a very very BAD SIGNAL!  As the old highs are being taken out, consider this as your warning that the system is becoming untenable and unstable.  The metals will tell you exactly when “game over” has arrived.  Do not be “happy” as new highs arrive, be “happy” that you own as many ounces as you do because your ability live, trade and survive will depend on this.  Do not make the mistake of counting your net worth in fiat because at the stroke of a pen, the whim or mistake of a trader, or the movement of the masses can zero out your paper net worth as fast as the Sun can rise!