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Alex Jones: The Establishment is Going for Broke !

Greece’s Debt Crisis Worsens: Will Europe’s Other ‘PIIGS’ Get Fried?

• The focus on Greece is really a subterfuge for covering up the problem facing America. The Illuminists are using it to buy time to get out of their positions in America. I believe they are actively shorting the USDX (US Dollar Index) while the useful idiots imbibe the hoohah over Greece and the shaky Euro! You have to be quite mad to sell the Euro and buy the USD. Instead of shooting themselves on the foot the useful idiots want to shoot themselves in the head. The debt problems in the Eurozone though bad are no where as ginormous as that of America!  The Illuminists are positioning the pieces for a global monetary meltdown centred around the USD!
   
  Greece’s Debt Crisis Worsens: Will Europe’s Other ‘PIIGS’ Get Fried?
  Greece’s financial crisis worsened Thursday. Moody’s downgraded its bond ratings on Greek debt. This after the European Union’s statistics agency revealed Greece’s deficit is wider than expected. The IMF chief termed the developments “serious,” adding there’s no “silver bullet.”
   
  The markets reacted sharply to the news: Yields on 2-year Greek debt topped 10% for the first time since 1999, the euro approached a 1-year low vs. the dollar and a global stock selloff spilled over in the U.S. markets. 
   
  Representing just 2% of euro-zone GDP, the problem is not that Greece is “too big to fail” but that it is too interconnected to fail, as Aaron and Henry discuss in the accompanying segment. If Greece were allowed to default on its debt (a remote but not impossible scenario) it would call into question the long-term viability of the euro and, more immediately, raise more concern about Europe’s other so-called PIIGS: Portugal, Ireland, Italy and Spain.
   
  Greece seeks bailout from IMF, European Union
  Hobbled by exorbitant borrowing costs, Greece triggered an emergency aid plan Friday to draw cash from the International Monetary Fund and countries that use the euro — the first test of whether the EU is prepared to bail out one of its members.
   
  The package has enough money to keep Greece from defaulting on its massive debts anytime soon. But Athens still faces years of painful cutbacks and questions about its long-term finances, raising worries that its troubles will affect other indebted members of the European Union and further harm the euro currency.
   
  Greece edges closer to defaulting on its debt
  The Greek debt crisis escalated sharply Thursday, weakening the euro and sending ominous ripples across a stagnant European economy. Greece is on the edge of default as talks continue on a $56 billion rescue package from the International Monetary Fund and the European Union that is contingent on Athens taking further austerity measures. Even if the government agrees to more cuts, the rescue continues to face strong opposition from Germany, where the public fears it will have to shoulder an unfair burden in a bailout.
   
  IMF Managing Director Dominique Strauss-Kahn said he is not yet considering a restructuring of Greek debt, but he warned that there is no “silver bullet” to the nation’s fiscal woes. He said negotiations on a rescue package will take time, which Greece may not have.

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Fitch Warns Of Debt ‘Shock’ For Japan!

• The Japanese Yen will be devalued to inflate away their debts. There is no other alternative. All the major currencies in the world are toast! USD, Euro, Yen and UK Pound are headed towards toilet paper status. The global monetary crisis will come upon the world in about 1 year!
   
• Creditor nations like China will not escape unscathed. By pegging the Chinese Yuan (CNY) so rigidly to the USD, the Chinese are guaranteeing themselves hyperinflation when the USD is devalued easily 50%! By holding on to US$1T+ of US bonds and total US$2.4T of USD denominated assets, the Chinese are going to be fried when the USD becomes toilet paper. Creditor nations with sound economies are going to see all their hard-earned savings in US treasuries evaporate.
   
• Smart money are fleeing into physical gold/silver bullion. Take the advice of: Jim Rogers, Marc Faber, Bob Chapman, Jim Sinclair… gold is real money for 5000+ years!
   
  Fitch Ratings has warned that Japan’s sovereign debt is rising to ominously high levels as the workforce shrinks and deflation grinds deeper, while the government’s reserve assets may prove unusable for defence in a funding crisis.
    
  The agency said Japan’s gross public debt has reached 201pc of GDP and is likely to continue pushing higher into the danger zone unless premier Yukio Hatoyama starts to get a grip on public accounts.
   
  “Japan is increasingly vulnerable to an adverse interest rate shock, given the scale of government debt and hence the volume of refinancing,” said Andrew Colquhoun, Fitch’s Asia specialist. “The lack of a coherent and credible plan” for fiscal discipline is likely to put “downwards pressure on creditworthiness in the medium term.”
    
  The Fitch Report comes two days after the IMF warned that the global banking crisis has mutated into a sovereign debt crisis that risks setting off a second phase of economic turmoil. Tokyo has until now been able to borrow at ultra-low rates of around 1.30pc for 10-year bonds, drawing on a huge captive savings pool from its own citizens. While this reduces the risk of a “temporary liquidity problem” – or `sudden death’ in ratings parlance – as foreigners cut off funding, it does not protect Japan from deeper forces at work.
   
  “The slow but steady drop in the domestic savings rate could eventually undercut [Japan's] ability to fund itself locally at nominal yields and makes it more vulnerable to interest rate and refinancing risks,” he said. Even at the current low rates – 0.16pc for two years, and 0.49pc for five years – interest payments already match 10pc of tax revenues. This is twice the average for OECD rich states. A sharp jump in yields would be ugly.
   
  Tokyo stresses that “net” debt at 97pc of GDP is a better indicator of Japan’s health, since this takes into account the country’s assets at home and abroad. Fitch said these assets may prove illusory. A chunk equal to 38pc of GDP is in the form of lending to business. “It would be difficult to liquidate these assets in the event that [Japan] encountered payment stress, and the value of such assets is uncertain,” it said. A second chunk worth 20pc is in foreign reserves, mostly US Treasuries. This could not be converted quickly into yen without causing currency havoc.
   
  The deflation curse is a large part of Japan’s story. Falling prices alone added 1.6 percentage points a year to public debt in the decade after 1998. This has since accelerated. Nominal GDP has contracted by 5pc over the last two years, eating away at the tax base. Debt and deflation do not mix well.

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Dr Gloom: Governments ‘Will Bankrupt Us’ !

• Marc Faber is correct: profligate and irresponsible governments will bankrupt us. Gold is the calamity insurance! CNBC reports:
    
  Current economic policies are not sustainable and the world faces doom because “the governments are taking over”, said Marc Faber, editor & publisher of The Gloom, Boom & Doom Report. “They will all bankrupt us and expropriate us, but it may not happen tomorrow. They’ll give us something to play with, until the whole system breaks down…they’ll just print money and print more money,” he said on CNBC Thursday.
     
  “What I object to the current government intervention in so-called ‘solving the crisis’, (is that) they haven’t solved anything. They’ve just postponed it.” Faber warned that the “ultimate armageddon” would be much worse the next time around, as “governments will go bust”, which would lead them to print more money. He also warned that China’s growth was “completely unsustainable in the long run,” highlighting the red-hot property sector.
    …
  Cash Will be ‘A Disaster’, Accumulate Gold
  In light of the current economic environment, investors should not own cash as it is going to be ‘a disaster’, said Faber. “If you print money like in Zimbabwe… the purchasing power of money goes down, and the standards of living go down, and eventually, you have a civil war,” he added. Faber warned that the mood has turned very very negative among certain groups of society.
   
  Instead of holding cash, Faber, commonly referred to as ‘Dr Gloom’, advised investors to “gradually accumulate physical gold and silver” while those who want exposure to shares of gold exploration companies should buy them from time-to-time when they become cheap.
    
  “Some of them still have reasonably good value at the present time. This is a long-term strategy because in an environment where governments will print money — and I’m convinced they’re gong to bailout Greece, which means you transfer essentially bad assets on to the balance sheet on the government,” he said. When that happens, Faber warned the purchasing power of paper money will go down, rather than an appreciation of precious metal prices.
   
  “Paper money (will go) down relative to precious metals. So in that environment, I think you…should all accumulate some gold.”

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