Europe is about to get UGLY!!!
On October 25th, we put out the following article,
The deal was an obvious Greek default, private bondholders were going to get screwed, and the worst part was even after the planned default proposal, Greece would have still been insolvent.
However, even as the market rallied, the bond market wasn’t fooled and we knew there would be serious trouble ahead for Greece, Europe, and global markets.
Not even a week since the great miracle deal of 2011 was made, the markets are back in panic mode. FutureMoneyTrends.com believes the only way Greece can began to fix their problems is to leave the Euro. Their entire system is going to collapse no matter what they do and trying to fix it is just going to cause more pain to the public and entitlement slaves that they have created. Greek Prime Minister George Papandreou called last night for a referendum on the bailout plan as the public lashed out over further austerity and a deepening Greek depression.
What’s going on in Greece is EXACTLY why America’s founding fathers didn’t set up a democracy. Greece for a long time voted to give themselves gifts, so many gifts they are now bankrupt. Now that they have voted themselves into bankruptcy with entitlements and government jobs for all, the politicians are too scared to do anything that goes against the mob. The mob will vote out of office any politician who tries to take away all their free stuff, unfortunately this mentality has spread across the western world. The U.S. is probably about 5 years behind Greece at the rate we are going. Currently 22% of the U.S. population doesn’t pay income taxes, yet they receive government benefits. So basically, 22% of the American population is being paid to live in the U.S. Do you think those people are ever going to vote to cut government?
Now for the next 2 months, assuming Greece doesn’t go into a complete meltdown, the world will face uncertainty in the Euro zone. Remember how much it took for them to finally get last weeks’ deal done, imagine them going back to square one if this Friday’s vote of confidence in government is defeated throwing Greece into elections? Elections that would have politicians running on a new deal for Greece, one with less pain or no pain at all? The bottom line is we are going to continue to face very volatile markets as the sovereign debt crisis grows, because remember, if it’s not Greece, it’sItaly, if not Europe, it’s the U.S.
Don’t forget the U.S. has the super congress crisis in less than 3 weeks.
The Bear Market
Just to be clear, bull markets DO NOT move like this. The more violent the rally, the more certain we are that the bear market has continued. Nothing moves a market like short coverings, however in the end, the fundamentals haven’t changed.
In the past 3 months, the market has rallied on nothing but rumors and false hope.
- 2 major rallies from rumors that QE3 was going to be announced
- 2 major rallies from a Greek solution
As noted in our October 25th Euro Alert!
Overall Europe is in very bad shape when you take a look at the books.
- Nations like France and Italy spend more than 14% of their GDP just on pensions to retired government worker
- European banks are leveraged 25 to 1, that’s double of even U.S. banks!
- In order for EU nations to pay for their unfunded promises of national health care, pensions, and other social programs, each EU nation would need at least 400% more than their current GDP!
- Germany, the so called economically strong nation in the EU, has unfunded liabilities of more than 7 trillion Euros, with their official debt to GDP ratio at 78%. However, when you actually include what they really owe, debt to GDP is 284%.
- Even German ex-central banker, Axel Weber, has warned that Germany is much worse than people believe.
- They live beyond their means, especially the southern nations. Greece, for example, has increased salaries for state officials by 76% since the introduction of the Euro, wages overall have increased by 42%. The easy credit and low interest rates have given fiscally irresponsible nations a false sense of how much debt they can afford.
- Spain and Portugal will not meet their deficit reduction targets this year or ever, in our opinion.
- Italian Government is on the brink of collapse.
- We are getting reports that bank runs in Greece have already begun, one report stated that this morning over 5,000 customers lined up in order to make withdraws. Up to half are transferring their wealth out of the country.
Official debt for financial companies (excluding derivatives) in Europe is 23 TRILLION!!! That is 43% more than the entire European annual GDP!
In our opinion, the dominoes have begun to fall, first Greece, then the banks, then the Euro. The great sovereign debt crisis of 2012 has begun. Are you ready?
Expect more updates to follow on Europe, the U.S., and specifically the U.S. Treasury market later this week.
There are permanent forces at work here, the entitlements of democracy, a debt based monetary system, and the rich vs. the poor.
In December, we will be releasing a special 2012 predictions report that is sure to shock some of you. Let’s just say if you are feeling a little blue, our predictions should put you over the edge.
One of our predictions that we feel we should discuss right now is that western democracies will turn more and more violent. Civil unrest due to long term unemployment and austerity measures will likely set the mob off. We should get a break going into the winter as it will simply be too cold for long protests. However, come February, we believe a fire will spread across European nations and the United States.
Why are we telling you this now before our 2012 predictions report comes out next month, because we want you to have time to act on this information just in case we are wrong and civil unrest breaks out in 2011.
The math is ugly, high youth unemployment + peak government + fiat currency + a 100 years of dumbing down society + mob rule = Civil chaos.
Think about it for a second, when you see thousands of people inOakland, LA, and New York City having protest sleepovers, do you think those people are calling in sick in the morning? No, these people are the casualties of a society that has too much government micro-management in their lives, a currency that is created by banks, and a system that encourages its citizens to get into debt.
More on that next month. Until then, make sure if you live close to a city you have at least 1 month of food and water stored, as well as a plan to protect yourself and your family. We are not conspiracy theorist, we are realists. Yes we love spotting future trends and trying to make a profit, but we also know that it is always prudent to prepare for the worst. If civil unrest was to cause transportation disruptions or looting, then we want our members and their families to be safe.
Our staff members here at FutureMoneyTrends.com have at least a 1 year supply of food and water, mainly because we live in Californiaand want to be prepared for a major earthquake. Hopefully we never have to use it, but it is always good to know that you are independent of government help during a crisis. Remember, in any crisis, whether it be a hurricane, earthquake, or economic, you NEVER want to be a refuge. Think about the people in New Orleans during Katrina, do you really want to depend on the government during a time of crisis? Do you really think you just need 3 days of food?