If You’re Not Scared, You’re Not Paying Attention

Forget the details and the specifics… here’s the latest news you need to know about.


Europe is bankrupt and the EU will not exist in its current form within 12 months. The ECB tried to “bailout our way to success” strategy on some of the more minor players (Greece), but is now finding that there isn’t actually enough money to bail out the larger players (Spain and Italy).


So, barring a leveraged buyout of Italy by Germany and China, the EU will be breaking up and the Euro collapsing within the next 12 months. How this will happen remains to be seen (the EU splits into two sections? Is done away with altogether? Etc). But the facts remain that the EU has reached the end game for bailouts (you cannot bail out entire countries).


The last straw of hope that the bulls are clinging is China’s recent decision to actively buy EU member states’ sovereign debt. Those of us who recall China’s decision to buy Morgan Stanley in 2008 can’t help but wonder if the country has never heard of “due diligence” or if it simply doesn’t care about losing money.


Speaking of China, the People’s Republic is finding out that the Republic made $540 billion worth of loans to the people that:


1)   Have not been accounted for

2)   Are properly garbage and won’t be paid back


We all know how this scheme ends (see subprime collapse in US). However, given that China pretty much makes up its economic data, it’s pretty safe to assume that the bad loan situation there is even worse than Moody’s believes. So look for a “2008 type” bust in China in the coming months.


And then of course there’s the US: the current least horrendous disaster winner by default (literally in Europe’s case and metaphorically in China’s case). Congress continues to play “debt talk” phone tag with President Obama.


However, to say this is a debate ignores the fact that there isn’t actually two sides to this discussion. Both Congress and the White House are debt-crazed groups who believe throwing good money after bad = recovery. So regardless of whether the debt ceiling is raised or budget talks reach an agreement, the US is broke and will continue to be until we default and restructure our debt obligations.


In simple terms, what I’m trying to say is that we are about to witness another “2008” only on a sovereign scale. The EU will be first, but China, Japan, and even the US will be defaulting in the future. The implications these actions have for asset classes will be HUGE as all assets move relative to sovereign bonds which used to be considered the primary low risk asset class in the world.


So expect another bigger Crisis that will feature huge waves of volatility, market crashes, debt defaults, civil unrest, food shortages, bank holidays and the like.


On that note, if you’ve yet to prepare for these issues, you can download my FREE report devoted to showing in painstaking detail how to protect yourself and your portfolio from the coming ROUND TWO of the Financial Crisis (round one wiped out $11 TRILLION in wealth).


I call it The Financial Crisis “Round Two” Survival Kit. And its 17 pages contain a wealth of information about portfolio protection, which investments to own, which to avoid, and how to take out Catastrophe Insurance on the stock market (this “insurance” paid out triple digit gains in the Autumn of 2008).


Again, this is all 100% FREE. To pick up your copy today, go to http://www.gainspainscapital.com and click on FREE REPORTS.


Good Investing!


Graham Summers


PS. We also offer a FREE Special Report on the inflation situation in the US. This other FREE Special Report, The Inflationary Disaster explains not only why inflation is here now, why the Fed is powerless to stop it, and three investments that absolutely EXPLODE as a result of this.


All in all its 14 pages contain a literal treasure trove of information on how to take steps to prepare AND profit from what’s to come. And it’s all 100% FREE.


To pick up your copy today, go to http://www.gainspainscapital.com and click on FREE REPORTS.















No comments yet! Be the first to add yours.