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Robert Fitzwilson: Greek Elections, Collapse of Debt Based Monetary System, Financial Derivatives Implosion …

  • Aftermath Of Greek Elections & How It Will Affect Investors! 
    With many investors wondering what to expect in the aftermath of the Greek elections, today 40 year veteran, Robert Fitzwilson, wrote the following piece exclusively for King World News.  Fitzwilson is founder of The Portola Group, one of the premier boutique firms in the United States.  Here are Fitzwilson’s observations:  “Investors and savers alike are transfixed on the election in Greece.  The headline issues were whether or not Greece would retain the Euro, stay in the eurozone, return to the drachma, default on the debt owed to European entities or a combination of the above.  We believed those outcomes were secondary to the much more important issues.”
    “The amount of money which is owed is monumentally in excess of the capability of any of the debtor nations to settle their accounts, even if they were inclined to do so.  With the French lowering the retirement age, Spain and Greece rioting against austerity, the emphatic answer is that they are not so inclined.

    The second issue is the ‘debt as money’ (DAM) monetary system that has overtaken the world in the last 100 years.  The Greek debt is held by European entities as assets on their balance sheets.  Banks lend based upon their capital base.  If the Greeks formally default, the lending ability of the banks is diminished, perhaps catastrophically. If a default occurs, how do the banks get recapitalized?  What happens to the quadrillion-plus dollars of derivatives?
    As we have suggested before, the mountain of paper and derivatives will collapse under it’s own weight at some indeterminate point.  Therefore, it is incumbent upon investors to act now and transfer wealth from paper to real assets.

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June 18, 2012 - Posted by | Economics, GeoPolitics | , , , , , , , , , , , ,

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