Guest Post: Road Map To Ruin

Tyler Durden's picture

From Alexander Gloy of Lighthouse Investment Management

Road Map to Ruin

  • Budget deficits in “good” times, build-up of government debt
  • Few countries’ (GER, NED) exports lead to trade deficits for others (GR, ESP, POR)
  • Costly bank bail-outs and fiscal “stimulus”
  • Monetary stimulus (0% interest rates); useless
  • Rating agencies finally wake up (downgrades)
  • PIIGS unable to sell more debt as yields rise
  • IMF/EU (read: taxpayers) step in to provide more debt, crowding out private investors
  • Austerity measures lead to social unrest

  • Corporations unable to access capital markets
  • Default and Euro exit by various countries
  • Run on banks, bank “holidays” (closed for week)
  • Insurance companies going bankrupt
  • Capital controls (restricted transfer of money)
  • Indiscriminate printing of money by ECB/EU/IMF
  • “Super-tax” on gold to punish “speculators” after gold price triples. Some Central Banks discover their gold is gone. Run on gold. Paper gold worthless.