Submitted by Simon Black of Sovereign Man
If You Haven’t Bought Any Gold Yet…
Print. Lie. Borrow. Deceive. Deny. These are a the principal tenants
of the Greek restructuring plan that were released today from Brussels…
it’s as if EU policymakers put it together after shaking a Magic
The whole world knows that Greece is bankrupt and has been living
bailout to bailout for over a year. Deep in debt and devoid of cash, the
country has completely forsaken its sovereignty in exchange for
becoming a ward of the European Union; Prime Minister George Papandreou
is now a hapless stooge awaiting instructions from Germany.
It’s ironic that the Greek proposal released today calls for a
‘Marshall Plan’ of investment across Europe… given that the last time
Greece was being controlled by Germany was during the country’s
occupation by Nazi forces after being vanquished by Hitler’s 12th Army
in April 1941.
And so, with limited debate and even less fanfare, Europe has just
officially signed on to destroy its own currency. Utterly worthless,
quasi-defaulted Greek debt will become perfectly acceptable collateral,
much in the same way that the US Federal Reserve took every scrap of
toxic paper it could find off banks in 2008 and 2009.
Given the favorable market reaction, European politicians must be
feeling pretty proud of themselves. The euro is up. The stock market is
up. Oil is up. Well, never mind about oil, they’ll blame that on evil
speculators… just like food prices.
And the proposal is so deliberately vague, they can go back home and
tell constituents whatever they want. Angela Merkel can tell German
voters that the French are paying for it, and Sarkozy and tell French
voters that the Germans are paying for it. Win, win!
The European sovereign default SOP has just been set. When Spain,
Italy, Portugal, and Ireland’s time of insolvency arrives, it will be
handled just like this: Print. Lie. Borrow. Deceive. Deny.
Every day it becomes more and more obvious that the financial system
as we know it is breaking down. The United States and European monetary
union, whose currencies comprise nearly the entirety of the world’s fiat
reserves, have both signed up to debase their currencies as rapidly as
This is going to kick inflation up another notch as anyone holding on
to Greek debt is going to trade out of it as quickly as possible. All
that money has to go somewhere… and it’s a sure bet that a lot of it
will feed rising commodities price (which translates into more
If you haven’t found a safe haven for your savings yet, it’s time to start. Now. No more excuses. A few you could consider:
Swiss franc, Norwegian krone, Singapore dollar, Chilean peso: These
four currencies are generally regarded as safer, stronger, and managed
by less obtuse central banks. In a world of fiat, these are among the
least worst of the bunch.
Unidad de Fomento (UF): This is a special unit of account used in
Chile that was set up during the hyperinflation days of the 1960s. The
UF is designed to keep pace with inflation and it’s possible to
establish a bank account denominated in UF in Chile. I’ll be telling SMC members how to do that in an upcoming issue.
Agricultural Property: Nothing hedges your risk against rising food
prices like being able to produce your own food. This idea underpins the
concept for the resilient community we’re planning in South America.
Precious Metals: Portable, divisible, durable, and scarce, precious
metals are the classic hedge against rising prices. Gold and silver
aren’t going to go up in a straight line, and gold in particular is due
for a correction, but in a world ruled by an economic magic 8-ball, it’s
a much safer store of value than a government IOU.
High quality equities: If my only two options are Apple stock and a
bank account earning 0% interest, I’m going with Steve Jobs. The chief
problem with equities is that the more money that central banks print,
the more money flows into equities… pushing valuations up to dizzying
(and unsustainable) levels.
Firearms and ammunition: Weapons and ammo serve a dual purpose of
providing better home security, as well as a reasonable store of value.
Unfortunately, they can also serve a third purpose– putting you on some
government agency’s radar.
This list is by no means exhaustive… but if you have the majority of
your savings just sitting there wasting away, it’s time to act.