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The Greeks voted “no” and should be applauded for their valor!  Knowingly or not, their no vote has added extra cards to their hand.  They now have more options than they would have had with a yes vote.  In fact, Greece still has the only option they would have had with a yes vote (cut a deal for “more aid” and austerity), plus many other which pressure the lenders.  I must say, a “vote” coming from the cradle of democracy CONTRARY to what the banksters wanted is a breath of fresh air!

Now what?  Greece basically can go down three very different roads.  They can use their “new freedom” to either negotiate new aid and restructuring, they can stay in the Eurozone while not paying on their debt and using a new drachma or, …they can go full Iceland!  Please understand this, no matter what they choose, their banking system is inedible toast and they cannot pay their debt service let alone the principal.  The bottom line is “someone” will have to eat the losses.  Whether it be the ECB itself, European banks or whomever, the debt will not be paid and someone, somewhere will have to “lose”.  Keep in mind this is happening while liquidity is already quite tight.

It is  possible we could see some sort of deal where “the world is saved” and a violent short covering rally in everything ensues.  Should this occur, do not be fooled because nothing can nor will be fixed.  Can they buy a month or three months time with Greece?  Probably but as liquidity is drying up, accidents are more likely to happen.  Countering this thought process, Greece does also have an “out” should they decide to turn toward any help offered by Russia and China.  If this is the choice, I believe it’s a very good bet that rioting and even a coup may be “helped” from the shadows.  I won’t elaborate on this but should it appear Greece is moving away from the West, unrest of all sorts will surely be “stirred” up!

Of their options available, I personally believe they should go “whole hog Iceland”.  What is best for Greece for the future would be to put a moratorium on payments and outright default.  They would then be forced to issue a new drachma to conduct commerce with.  I also believe they should leave the Eurozone and focus trade toward the East where their new drachma would be more likely to be accepted.  Greece would be forced to “start over” from ground zero, not a happy prospect but one where at least a foundation exists.  The “old” world order will not stand in the long run, it may fall apart piece by piece or all at once.

The piece by piece scenario would include Portugal, then Spain, and then Italy (with France mixed in there) wanting to go down the same Greek road.  We very well may see national referendums becoming the new fad.  All of these countries will want some sort of relief from their debt as the numbers are clearly unsustainable.  Talk of the situation being contained is laughable.  So laughable, the whole system could go from “normal” to “over” in 48 hours in my opinion.

Look around the world, China is now down 25+% in just over three weeks.  Europe, it’s currency and even the Union itself is in question …and the Federal Reserve needs to do something in the credibility department.  What I am saying is this, can the Fed really tighten ANYTHING in the current environment?  As I mentioned previously, liquidity is rapidly going away …in an over indebted system this is the most potent of poison!  As I see it, a massive dose of new QE will have to be administered just to keep the doors open.  Watch for this!

Meanwhile, “we” look like idiots to those we have tried to help.  While the credit market is on the cusp of breakdown and full seizure, gold and silver prices got smashed again today.  Funny thing though, even though there has been so much “selling”, the U.S. Mint has apparently suspended sales of Silver Eagles!  I will ask the question again as I have before, if there is so much “selling” of silver, why can’t the Mint source it to sell?  It is their mandate!  It is the law (which matters not anymore)!

Are we moving into a zone where COMEX prices will get hit further …while the mint sells nothing until August (if we even make it to August) …and then we see some sort of credit/financial/international event where force majeure is declared?  For whatever reason the Mint can conjure …can’t source metal …can’t keep up with demand …or whatever, a suspension of sales does not jibe with massive panic selling of “metal”.  Unless of course they say “we are suspending sales because there is no demand”.  I am sure a statement like this could be spun as Gospel truth!

Folks, we stand on the verge of the global credit markets coming to a grinding halt.  In our current world, NOTHING that we consider “normal” will transact or transpire without credit.  Our lives will change literally overnight without credit.  We are about to live through a massive wildfire of credit values burning to the ground, gold and silver will still be standing when the smoke clears.  It is completely laughable to see gold and silver forced down when the fear of credit collapse is rising.  Mother Nature doesn’t work this way, central banks wish she did!  I hope you have the will to “see through it”, the coordinated efforts to support paper markets and suppress gold and silver have been truly impressive.  The currency of the biggest, most indebted and “brokest” issuer in the world is attracting safe haven bids.  I assure you, once control is lost and we go into all out panic, even those pulling the levers will be moving against their own central banks!

Standing watch,

Bill Holter

Holter-Sinclair collaboration

Comments welcome!  bholter@hotmail.com