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What If Greece Says No?
With Greece set to dominate the news flow once again in the upcoming week, the question on everyone's mind is what would happen "if Greece says no", preferrably with some more nuance than just "the end of the world." So for everyone inquiring, here is SocGen's Michala Marcusen with a full timeline of the "what if" scenario.
From Societe Generale
The Greek Parliament is due to vote on the Medium-Term Fiscal Strategy (MTFS) on June 28 and the associated implementation law on June 30. If all goes well, the Eurogroup will then meet on July 3 to finalise a new 3-year program for Greece. If the Greek Parliament votes No (a scenario to which we attach a 30% probability), the much need next €12bn tranche of the EU/IMF would be blocked and Greece would be left grappling for funding in a political vacuum pending a likely general election. In such a scenario, the EU would have to take aggressive action to stem contagion; and this could include reactivating the ECB’s SMP. Even in a best case solution, the euro area debt crisis seems likely to run from one issue to the next with the over-arching solution of a new credible fiscal policy infrastructure coming into place only very slowly.
If all goes well …
A yes vote in the Greek Parliament to the MTFS will no doubt bring a sign of relief, and the immediate focus will shift to the Eurogroup meeting on July 3.
What shape will the new program take? We expect the Eurogroup to define a 3-year package effectively removing the need for Greece to access bond markets before 2015. While there is no final number as of yet, a package of €85-120bn seems likely split between new EU/IMF loans worth €40-70bn, Greek privatisation receipts of around €25bn and private creditor participation of €20-30bn.
How will private creditors participate? At last week’s Eurogroup meeting a subtle change to ESM seniority, making loans to Greece, Portugal and Ireland exempt from the rule (pending approval by national parliaments) brought a small first concession to private creditors. However, press reports suggest that private creditors (and this mainly concerns banks, who hold the bulk of the shorter dated Greek paper) want more enhancements before agreeing to some form of maturity extension. An additional concern is not to trigger a credit event in the process, which the ECB rightly fears could have unintended consequences. Press reports last week (Bloomberg) suggested a solution under which banks roll over 70% of the expiring amount, placing 50% in Greek 30- year paper and 20% in very high quality securities that would then back the Greek bond.
One idea that has popped back up in the debate, but only to quickly disappear again is lending to Greece to buy back its bonds cheaply in the markets. The idea hold substantial appeal from an economics points of view in that it would partially help solvency as opposed to just funding. Politically, however, the idea has been met with substantial resistance, and notably in Germany. This could nonetheless be one of the last minute jokers in finalising a deal for Greece.
Also, keep in mind that the voluntary private creditor solution put in place for Greece could well serve as a blueprint for Portugal (the EU/IMF agreement on Portugal, explicitly notes that Portugal should negotiate with private creditors to maintain their exposure to Portugal).
Will Greece fail at the first hurdle? Any new package for Greece comes with strict conditionality and with a review by the “troika” of the IMF, EU Commission and ECB every three months. Even with the best of will, Greece will find it very difficult to meet the targets and much relies on the ability of Greece to effectively collect taxes and privatise. Unions are already planning strikes for next week with the threat of disruptive power cuts. There is thus every risk that Greece will at some point fail to meet the targets set out. The question then becomes just how much tolerance the EU/IMF will adopt towards Greece. Even with a package in place, repairing the situation in Greece will be a long and painful process, and one fraught with risks.
Can Greece ultimately avoid default? The sustainability of Greek public finances depends critically on the snowball effect, i.e. the difference between nominal GDP growth and the funding rate and the level of the primary surplus. Greece’s public debt today stands at almost 160% of GDP, with a primary balance forecast at -2.8% in 2011 and nominal GDP forecast at -3.1%. Even with the attractive funding rates provided by the EU and IMF (just under 4% at present), the situation is clearly not sustainable.
Making a back of the envelope calculation, we find that if Greece can sustain a primary budget balance and enjoy nominal GDP growth that exceeds the implicit interest rate on its debt by 1pp, it would take Greece 100 years to reach a debt-to-GDP ratio of 100%. If Greece in addition could sustain a primary budget surplus of 1% of GDP every year, it would take 50 years.
Theoretically, Greece can avoid default, but it depends critically on the ability to achieve growth, run a primary surplus and achieve a cheap rate of funding. If the rest of Europe wants to avoid Greek default, it seems it may be funding the country for many years to come.
Can the euro area avoid contagion? The risk of contagion from Greece is substantial. In building a new fiscal framework for Europe, the hope is one day to allow for an “orderly default” within the region. Last week’s EU Summit brought good progress on the ESM and EFSF, and the Six Pact (the new stronger version of the Stability of Growth Pact) is near completion. In our opinion, however, there is still considerable more work to complete and we maintain our view that ultimately a single euro bond and a single bank resolution mechanism (similar to the US FDIC) is required. Such mechanisms are still far out (years) on the political horizon leaving the euro area open to new bouts of tension.
…if Greece says No
A No vote to the MTFS by the Greek Parliament will cast Greece into turmoil and threaten wildfire contagion throughout the euro area.
What happens in Greece if Parliament says No? The country would be thrown in a political vacuum with an election then most likely being called. The centre-right opposition, New Democracy led by Antonis Samaras, is well positioned to win in the event of an early election. We note that Samaras is not opposed to austerity per se but wants a “different economic policy” not based on excessive taxation and with a strong focus on growth. Once in place, a new government would then have to renegotiate a new deal with the EU/IMF. The most likely outcome – similar to what we have seen in Ireland and Portugal – is that the new Greek government would in the end sign up for austerity.
Will Greece automatically default? A No would block the much needed next tranche of the EU/IMF loan of €12bn, leaving big question marks as to how Greece would fund coupon payments and bond redemptions in July and August.
Over the weekend, German MoF Schaeuble was very clear that a No vote from Greece could mean no funding for Greece from the EU. For funding, Greece would then have to rely on short-term paper until a new government could be formed and a new MTFS negotiated. The EU may in such an event ultimately agree to some form of bridge loan (similar to Portugal). The IMF could also agree to credit line. Any help from the EU/IMF would come reluctantly, and there is a nonnegligible risk that a No vote could put Greece in default.
Can contagion be stemmed? Contagion would run through government bond markets and via interbank funding markets. In both cases, the ECB is best placed to respond reactivating its Securities Market Program of government bond purchases and offering adequate liquidity to banks.
These measures will be primarily effective in tackling shortterm market tensions, but the euro area are still potentially at danger from seeing more countries (and notably Spain, and potentially even Italy) making recourse to the EFSF. Such a negative scenario would threaten not only the financial stability of the euro area, but the global financial system with severe consequences for the global economy. This also explains why, even in the event of a Greek No, euro area leaders would be keen to avoid experimenting a Greek default.
Conflicting time horizons
The main issue for the euro area remains one of conflicting time horizon. Fixing solvency for countries with weak public finances and shaping a new credibility fiscal policy framework for Europe will take time. Markets have little patience, and policymakers have every interest to accelerate wherever possible.
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A Lot of political theater and handwringing when, in reality, the can will be kicked down the road, but not just for three months; more likely a year solution will be found. The NWO elites want at least a year while the US milit (err NATO) steals gold and other assets from Lybia, Yemen and even Syria for them. Then, after a year, everything will be fine except for Spain and Portugal, and then of course the US States.
There is too much pressues on Greece from all sides to cause an "event", as they describe it. I think they will pass some form of
a bailout. I think it would be better to restructure the debt, but, that is a little too painfull for the bondholders. So, I would predict
that we will see it pass, and yet another round of inflationary economic policy. Their only answer, and this applies to all nations
that seem to be on this road to salvation, is to print more money. Fill the holes, and pray that they go away.
Inflation will be GOOD for the Precious Metals.
I also think the market will tank. Remember the day of the bailout in U.S.A? Maybe Friday was the market pricing it in or maybe
it was a leading indictor of sentiment against the situation in greece. I guess we will see soon.
They will "pass" their idiotic "bill"--there is zero chance they won't. It's how the game is played. Cue the bulls--for one day. Then cue risk-off as everyone runs around "worrying" about the next "vote".
This bullshit is endless--will go on for years. There is no crash coming, just broken, untradeable markets in everything. PMs are arguably OK as a savings vehicle for individuals but the apocalyptic "to the moon" scenario endlessly argued here and elsewhere will never come to pass.
I tend to agree somewhat- I'm not looking for "to the moon" so much as I am looking for value retention. That's in short supply these days.
And if the markets remain broken and untradeable for too long, no one will be left to participate or care, and physical commodities will be the only game in town.
Think bulls will run strong for more than one day. Had selloff on low volume and expect another sharp "Kick the can down the road" rally when Greece completes this phony ass puppet show with a "Yes".
If the Greece says no then the Bernank and the Trichet will paper over the insolvency with the liquidity.
Exactly
I agree also; and the mechanism is in place for Obama, Geithner & Bernanke to do it. If they use the ESF, then they run the risk as in Germany of some Constitutional scholars raising some issues on the founding Statute.
From the Cato Institute in 1995 re the Mexican Peso crisis of 1994-1995:
Separation of Powers
""The Clinton administration's original proposal of a $40 billion rescue package for Mexico had one redeeming feature: the administration sought congressional authorization, in keeping with the constitutional separation of powers between the executive branch and Congress. Dropping that plan in favor of the smaller program agreed to on February 20 amounted to an end-run around the congressional appropriation process. It should be noted that Congress, pleased with the opportunity to sidestep a vexing choice, implicitly endorsed that abuse.
The ESF: History, Abuse, and Partial Reform. The Exchange Stabilization Fund is a relic of the 1934 Gold Reserve Act, sought by President Franklin D. Roosevelt as a means of countering perceived trade advantages secured by Britain through foreign exchange interventions in the early 1930s.(21) By establishing the ESF, section 20 of the Gold Reserve Act gave the secretary of the treasury, in consultation with the president, the ability to intervene in foreign exchange markets and make loans aimed at "stabilizing the foreign exchange value of the dollar." The temporary authority for the ESF provided by the Gold Reserve Act was repeatedly renewed until it was made permanent in 1945.(22)
After the fixed exchange rate regime of Bretton Woods dissolved in 1973, the purpose of the ESF was changed to "being consistent with U.S. obligations in the IMF regarding orderly exchange arrangements and a stable system of exchange rates."(23) In addition to fueling intervention inforeign exchange markets, the ESF has been tapped to finance short-term loans to both developed and developing countries.
The fund was capitalized with $2 billion from the revaluation of U.S. gold holdings and was used to intervene actively in foreign exchange markets during the 1930s. In 1947, $1.8 billion of ESF resources was used to make partial payment of the U.S. quota in the IMF, reducing the balance to $200 million.(24) Congress has made no other appropriations to the ESF, but the interest on U.S. and foreign securities, interest and fees on loans, and net gains from foreign currency transactions have raised the balance to approximately $25 billion.(25)
The lure of the vast discretionary funds proved too much to resist. As one journalist put it, "The only limitation [on ESF spending] has been the sitting Treasury Secretary's imagination."(26) A series of secretaries tapped the ESF to pay the salaries of Central Intelligence Agency and Treasury staffers and diplomats; underwrite luncheons and receptions; and cover lodging, hotel bills, and travel expenses. Apparently, spending for any purpose remotely related to the foreign exchange value of the dollar was considered legitimate. Congress discovered and put an end to those abuses in the late 1970s by requiring that funds be spent only when there was an assured source of repayment.(27)
Because the ESF is not financed with regular appropriations from Congress, it must "borrow" from the Fed when it seeks additional funds. That practice is known as "warehousing" because the Treasury stores or "warehouses" its foreign currencies at the Fed in exchange for dollars that must be paid back later. The Federal Open Market Committee regularly approves "warehouse" lines for Treasury borrowings. The Treasury borrowed heavily against those lines in the late 1980s, and as a result congressional hearings were held in 1990 on the ESF and the Fed's warehousing activities. Loans to the Treasury from the Fed were subsequently discontinued, although the warehousing lines remain in place for future use.
The ESF and Mexico in 1995. After failing to secure congressional approval of a $40 billion loan guarantee for Mexico in mid-January, President Clinton announced an executive order on January 31 giving Mexico access to 1-year and 5-year loans and 10-year securities guarantees amounting to $20 billion from the ESF. On February 21, the Treasury signed an agreement with Mexico on the exact terms and conditions. The United States made available $3 billion on March 14.(28) In the following three months an additional $7billion was disbursed, and $2.5 billion was lent on July 5.(29) The remaining $7.5 billion is still available under the terms of the agreement.
The assistance package is 20 times greater than the largest of the 40 ESF financing agreements extended between January 1980 and June 1994.(30) The president declared the existence of "unique and emergency conditions," as required under 1978 legislation to commit resources of the ESF for more than 6 months in any 12-month period. The largest previously established credit line of $1 billion was extended to Mexico in August 1982. The ESF loan with the longest duration was for $600 million from September 1982 to August 1983.(31)
Additional money is being provided in an equally extraordinary package by the IMF. Under IMF rules, Mexico was able to borrow no more than an additional $3 billion. Under pressure from U.S. officials, the IMF approved a $7.8 billion credit anyway and pledged a further $10 billion after February 1995, provided that Mexico abided by the terms of a separate agreement. The loan is greater than total IMF lending in 1993 and 1994 combined, twice the amount ever loaned to any other country, and seven times Mexico's allocation.(32) European governments, concerned with aiding their more immediate East European neighbors, were understandably irked by the way the United States pushed the IMF into extending additional credit without seeking approval from them.
The fundamental objection to the involvement of the ESF is that it undermines the separation of powers. A case can be made that circumventing the congressional appropriations process violates Article I of the Constitution. In fact, the Gold Reserve Act itself is of questionable constitutionality, because it gives to the executive branch unreviewable authority to engage in covert actions in international finance--a sphere explicitly reserved solely for Congress by Article I, Section 8, clause 3 (the commerce clause).(33) In effect, the executive branch is financing the restructuring of Mexico's entire short-term, dollar-denominated debt without a congressional appropriation.(34)
Foreign aid has rarely drawn much support in the United States. As a consequence, administrations have attempted to avoid approaching Congress for appropriations for such ventures--the Iran-Contra scheme being a recent extreme example. The ESF has been a source of funds for discretionary executive branch spending, the likes of which Congress sought to prevent. The Constitution limits spending by theTreasury to appropriations approved by Congress. Moreover, the statutory authority for ESF activities pertains only to foreign exchange intervention to support the dollar.(35)
The obligations of the United States under the Articles of Agreement of the IMF, as amended in 1978, include maintenance of the "stability of foreign exchange arrangements." The agreement, however, is to avoid taking steps that destabilize markets, not to use financial resources of the United States to defend arbitrary exchange rates. The intent is to ensure the stability of the auction market mechanism, not of a particular set of prices that might arise from that auction.(36)
Central Bank Independence. The use of the Federal Reserve to fund Treasury activities not only raises questions about the separation of powers between the executive branch and Congress but also damages the principle of an independent central bank. Much effort has gone into keeping the Treasury and the Fed at arm's length from each other to reinforce both the perception and the reality of central bank independence. The comptroller of the currency and the secretary of the treasury originally served as ex officio members of the board of governors of the Federal Reserve System, but the Banking Act of 1935 ended that arrangement. In addition, the Fed does not purchase securities directly from the Treasury, the governors serve staggered terms, and the Fed does not depend on Congress for appropriations. Executive branch influence on the Fed through ESF transactions raises questions about the independence of monetary policymakers to pursue price stability.""
http://www.cato.org/pubs/pas/pa-243.html
In effect we will have a "troika" of the US Treasury, the FED, (disguised as the IMF) & the ECB. As more light is shed on the ESF, the unlimited powers of the principles involved may spark some legal Court fights over this act that has been extended far beyond it's original missions.
Another fundamental objection to the involvement of the ESF in the Mexico affair is that the incoming Treasury Secretary from Goldman Sachs hadn't even finished unpacking his Goldman moving boxes before he was bypassing Congress and bailing out Goldman Sachs (not the government of Mexico) with tens of billions of public dollars (with help of his little minions- fatboy larry summers and little timmay geithner).
"You unlock this bailout with the backing of imagination. Beyond it is another dimension: a dimension of unsound, a dimension of no foresight, a dimension of dumb. You're moving into a land of both shadow banking and Easing, of algos and grafts; you've just crossed over into the The Twilight of Keynes Zone."
World to Greece: Urgent... Call other PIIGS.... stop. Default at same time.... stop. Must Destroy New World Order .....stop.
Greece won't "say" no. They will say yes, and act like it is no. That way they get the dough and kick the issue forward another year- just like they did last year.
New world motto: Just say no to slavery .
It's not all that apocolyptic as they want you to think. If Greece says no and defaults, they nust immediately go back to the drahmae. They will attach it to the value of the gold they own... in Germany's and France's possession, devalue accordingly, reissue to their people. That's IT!
So, if Greece screws over the banks of Germany and France who just happen to have physical possession of Greece's gold, they'll allow Greece to attach their new currency to that gold? Something seems wrong with that picture...
Who gives a s**t. Eventually, many of us won’t live that long.
If Greece says, "No!", Sarkozy (the next Nobel Peace Prize Winner) will send in the troops and grab Greek assets. What's the difference between Libya and Greece?
An open letter to Jim Rickards... building a mezzanine over the minefield.
http://tradewithdave.com/?p=7114
Dave Harrison
www.tradewithdave.com
lets pray its a no
i cannot stand this keynesian nightmare any more
bring on the crash
On wires re: China debt/liquidity crunch
*China National Audit office says China local governments had incurred about CNY10.7trillion ($1.65trln) in debt as of end of 2010
China will NOT be bailing out anybody in the EU, they'll have to print to cover the black-holes in their own country...that and China bonds could credit a notch down.
...trouble ahead.
General Society, eh? Audacious abstraction for a pool of money with eyes.
How did they arrive at a 30% likelihood for a democratic body to agree to bilking its own people? Presumably the people around the table for writing this public report -- didn't want it to be 50/50, but 25% sounds too optimistic -- let's go with 30%.
There's much cynicism in this quantification -- no different in type than the Foreign Affairs stats on drone murders in Pakistan, or kill ratios in the Vietnam War -- same class of "seasoned technocrats" FT recommends for the new Peruvian Minister of Finance.
Another number, 160% debt to GDP ratio -- "clearly not sustainable" says SocGen. And I guess United States mass murder campaigns backed up 10x the debt numerically -- that is clearly sustainable.
I mean, we can't stop 'em from doing it, since we're just effete European technocrat slaves -- but the big money boys tell us it's not sustainable, so it "clearly" must not be.
What's with calculations on the basis of nation states anyhow? Obviously defunct anachronisms -- just 30% variables in a global spreadsheet. National responsibility used against nations when convenient, and superseded when possible and convenient. Just a public relations shell with functional responsibilites of dispursement.
"Politically, however, the idea has been met with substantial resistance, and notably in Germany."
Anybody got a sense if there are any Germans with political compassion larger than their own almost full employed selves? I realize "politically" here refers to the "private creditors" and their lusted for "enhancements" -- but any principled life left in the land of Luxemburg?
"Credit Event" -- sounds like a threat to set off another 9/11 to me -- oooh, the fucking rich get bilked on their loans. The rhetoric is so bland, which is why flows so ominously -- the "unintended consequences" -- that's class war challenge.
You rabble rousers try to resist, we'll fuck up your country sooo bad... we'll tell the tanks to come out, slaughter some few 100s, shut your dumb asses up -- and then let Europe taste the fascist provocation, see if there really aren't no communist to even try to stop us this time.
On a pretend envelope, since the Greek people are so meaningless we don't even use blank paper -- the SocGen finks compare 50 to 100 years of debt slavery -- oh, how the "private creditors" will love our menu!
"Contagion" -- fin-psy-war bums like this one, surprised it passes so easily amongst Europe's presumed more sophisticated populations -- good thing we had the E Coli murders to resonate. Them kuntress dat don't want the money medicine -- youz gonna get sick I tellz ya -- reeeeal sick.
"Conflicting Time Horizons" -- "Markets have little patience, and policymakers have every interest to accelerate wherever possible." -- Guess this is the diktat on the 30% probability, and threat at other opposition. Anything that even slows the rapacious designs of our bosses -- they're hungry!! -- don't even consider it-.
It is not just rich people who own greek bonds. Many retirement plans own them too.
It doesnt matter if greece accepts the plan or not. Socialists have now run out of opm ( other people's money) and it is dying. Mattets not which direction greece goes. Getting something for nothing is a thing of the past.
Greece is a country, it does not 'say' anything. There are a few elites who claim to speak on behalf of that piece of land, like the sun god claimed to speak on behalf of the sun.
It will flop, they won't be able to pass austerity, default set for Aug. Market is pricing that in now. Germany via Austria has already indicated the default option.
That sounds mysteriously close to the 90 day "stress test" period assumed by the DB study i posted...
The Greek people, not their politicians, hold this matter in their own hands.
This is because whether or not Greek politicans vote 'Yes', 'No', 'Abstain', 'I want to be at my other job', nothing changes the fact that if the Greek people start burning buildings, even Merkel will turn the tap off.
I don't want anyone hurt, but Merkel is no fool and will realise the effect of pictures of burning buildings in Athens on German voters (who have already given her party a kicking in local elections, and who would dearly love to have the DEM back, well beyond the influence of an Italian head of the ECB).
To be fair, Merkel's motives, at least in part, include the noble desire to spend the German people's money in a way that she thinks will reduce the chance of another European war.
But Merkel is a politician, and there are few politicians who will put anything ahead of their prospects of re-election.
How do you separate Greece from the Banksters?
With a crowbar.
This is so exciting!
I get to watch socialism die in my lifetime!
It doesnt matter if they default or accept the terms of the bailout. Socialism has committed suicide in the usual way, running out of other people's money to spend.
Obviously the ECB has been providing massive liquidity to Greek banks. No sane Greek will have at this time a € dime in his bank account. Expect to see people throwing themselves from the window at Frankfurt shortly.
Even if Greece says ''yes'' now, the problem will just get bigger for Europe when Greece says ''no'' later. Europe is getting sucked in and will one day be spat out. The fact that Greeks have survived constant onslaughts by foreigners for over 2500 years is a warning. Beware, the Trojan horse was never dismantled. It has been parked in the heart of every Greek who feels that Germany has to pay the price for its WWII wanton destruction and killing. Europe you have been warned.
In the world we live, where everything from real estate to the Fed balance sheet is upside down, the debtor now has the upper hand over the creditor. I think Donald Trump invented the tactic back in the late 1990’s with his highly leveraged casino development disasters in Atlantic City.
Hey, you have to give the guy credit for something, and it can’t be his toupee.
Sounds like either way we get a yes vote.
Both scenerio end up the same way, sounds like banker democracy is still in comtrol in Greece
The Bangsters were culprits in hiding the real Greek debt level just before they entered the Euro zone. GS and JPM actively participated in hiding part of the Greek debt through the use of derivatives. Then the Bangsters kept on lending more money for years at an extreme low cost to an already broke and highly corrupt country. These were years of irresponsible investment practice done by the banks. Therefore the Banks should get a haircut on the Greek debt. Not the tax payers (either German, French or Greek). I hope the Greeks default on their debt and let the TBTF Bangsters take a hit on the money that they first created out of thin air anyway. The hell with selling national Greek assets to feed the greedy bangsters. They created money out of thin air, lent it for years to a broke country and now they want nothing less than possessing Greek’s national assets on one side and get the German tax payers on the hook for the rest of whatever will be left unpaid.
We need a serious revolution here. What is going on in Greece is just a prelude of what will happen in the USA. These crocks have no limit on their greed and desire to possess as much of the world’s resources as they can. The whole monetary system we live in is the biggest scam that was ever created by mankind.
Sure I say default, bitchez.
Bankers deserve to lose money when they lend to greedy, corrupt, ignorant countries.
No doubt there were individual greeks who warned against excessive debt, but rain falls on the just and the unjust and all greeks will suffer because a majority of greeks voted in politicians who promised " free" things to the voters.
This is so exciting to watch socialism die. Check and mate, socialists! You can have austerity of default or austerity of german loan requirements.
You know what is going to happen. The fat lady has sung;
Tanks on streets, people jumping out of windows etc.
Default is just people stopping payments to banks. Under certain circumstances, some of the banks may stop existing and some of the people may experience some legal hassles and even privations. Since it is clearly inevitable, why not get the ball rolling?
As usual, China is the elephant in the room. With it's recent announcement to support the euro countries, another influential variable has been thrown into to the pot.
All predictions heretofore, are now worth less than a Short sale house Lost Vegas.
Time once again to reshuffle the deck chairs, throw the wimmin and children overboard, and take the elite off the top deck with helicopters.
China wants to be paid back their loans at some point, so letting the Euro fail wouldn't be too savvy.
Why do all you guys and gals[STEAL] My ideas.? Back to the drawing board.
P.S. Nice work! Yen Cross.
Well since Iceland, Lehman, etc... the world has slowly come to the stunning realization that we have reached peak oil, peak credit, peak fiat, etc. That those Gold guys were actually right for the past forty years and you can't have a system built upon debt and credit. The paper game is up and so Greece, or one of a hundred other problems in the global ponzi-scheme could set off a doomsday scenario.