In succinct synopsis of what lays just over the horizon ~ "the cycle of economic implosion" ~ for the ill-conceived amalgam known *today* as the European Union, phinance's phavorite political prisoner, Martin Armstrong, cautions that:
- "the EU is in dire position", on the precipice of shattering into default and civil unrest;
- the sovereign debt crisis materializing across Europe will soon reach US shores;
- the CFTC will curtail currency speculation by slashing leverage from 100:1 to 10:1, which "can cause a liquidity crisis that backfires, magnifying everything."
Since "debts will never be paid and interest expenditures are the greatest transfer of wealth in history", Armstrong suggests:
- freezing all national debt;
- issuing coupons whereby the debt is redeemable for local currency, which may then be invested in domestic debt or equity;
- each European nation establish an independent currency pegged to the Euro;
- swapping US debt to coupons that may be spent domestically.
Seeking to impart light from within the dark seclusion of maximum security solitary confinement, Armstrong concludes his (relatively minuscule by Armstrong standards) missive with stern warning.
" Western society is falling apart .... If we do not act, civil unrest will explode. The current choice is DEFAULT or HIGHER TAXES & CIVIL UNREST .... Someone has to step forward to save us or we may be doomed. It's time to wake up for this is the future of our children and their children at stake. "
Just one note of caution for those who may be emotionally inclined to move all-in on gold here because they think 'the dollar be dead': any way ya slice it, the United States remains the lender of last resort (at least when the IMF isn't told to stand in) ... and while everyone "knows" that gold is the clear beneficiary of sovereign default concerns, please realize that Uncle Buck ($) sits alone at the head of the table. Worries of US hyperinflation and the death of the dollar are each absurdly premature at this juvenile juncture of the sovereign default crisis; each may occur, in due time, but certainly not before Uncle Sam has finished picking up everyone else's tab.
Euro Valuation ~ Fail
Until the deflationary spectre of sovereign default runs its coarse course over the next depressionary decade (what inning could this even be ?), those who want to become millionaires rooting for regicide of King Dollar ought study Patricia Heaton's method for valuing the Euro's "worth" ... just take a deep breath (c. 8 yrs), recheck your mental abacus and, eventually, you'll get there.