It’s simple: Now that Greece has told European leaders to take a hike, the crisis will start spreading.
The consequences will unfold in a series of debt defaults, civil conflicts, social and financial upheavals and more.
It will spread – without a doubt – to the other peripheral economies of the European Union, namely Portugal, Spain and Italy.
Each one of them has unsustainable debts. Each and every one of them does not have the economic growth to support the debts.
Each and every one of them will eventually have to go the way of Greece, at first defaulting, then trying to stay in the euro, and then finally recognizing that it’s impossible to do so …
And that the only way out for their citizens and their economies it to leave the euro and take back their own currencies.
You see, when the euro got started, it contained the seeds of its own destruction.
For one thing, European leaders tried to put a one size fits all hat on all of Europe, through a single currency. Nice idea, but it failed to recognize the many disparate languages, histories and cultures of Europe.
For another, it subjugated each country’s sovereign identity to the powers that be in Brussels and Germany, robbing them of their democracies, and enslaving them to the wishes of European leaders who were nothing more than power-hungry mongers back then, in 1999 … and are even more power hungry today, to try and keep the euro intact.
And for yet another, those European leaders who expected to unite the Continent from a political perspective to avoid Europe’s long history of wars, they are about to see the entire experiment backfire.
For in the end, Europe’s euro advocates tried to do what Hitler tried: Unite the Continent into one union, one country, one financial system.
Whereas Hitler tried it militarily, and no doubt, was the most insane man ever …
Europe’s euro masters thought they could unite Europe peacefully through economic might.
But they were wrong, dead wrong, and the crisis that is now unfolding is going to produce precisely the opposite:
A Europe financially war-torn because euro leaders like Angela Merkel think they can call all the shots … think they can enslave other countries and people with debt … and dictate everything to them, under threats of no new loans, no humanitarian help, no futures unless you comply with their wishes.
Well, now it’s unraveling, right before their eyes. The Greek “No” vote is the best thing that Greece could have done. Now, Greece has clout. Now, Greece has stood up for itself. Now, Greece can move forward. Now, Greece does indeed have a future.
But in the short term, it’s not going to be pretty. For Greece, for other peripheral economies, for Europe as a whole.
Portugal will soon realize it can do the same, tell Merkel and Brussels to take a hike. Then Spain will jump into the fray. Then Italy, and more.
Protests and riots will spread. Civil conflict within nations between those who want to say yes to the euro and those who want to leave will erupt.
Conflict between the periphery and the core, namely Germany, will escalate.
The entire euro experiment will fail, violently.
And the entire process – as it unfolds over the months and years ahead – will turn everything you thought you knew about economics and financial markets, inside out and upside down.
What was once considered safe – like government bonds – will become the riskiest of investments …
While, on the flip side, what was once considered risky – like gold and precious metals, or even Greece’s stock market – will become the safest types of investments.
Fortunately, YOU will be prepared. You will not only PROTECT your wealth, you stand to GROW it as well.
As I noted in my last issue, come October, the crisis will really start to accelerate. It will last all the way through late 2020, a full five years.
In the shorter term, you are properly positioned. Last week, you should have been able to bag up to 48.3% gains on your long position in DUST.
You should have also been able to roll forward your July GLD put options to the new December GLD put options with a strike price of 110.
Gold initially bounced on the Greek ‘no’ vote, but is now acting weak again. Hold your new put options as well as your shares in DZZ, with a protective sell stop, good till cancelled at $6.43.
Also hold your bearish ETFs on the stock market, which is acting weak again this morning. The Dow is trading below 17,500 in pre-market trading as I pen this issue. A closing today below 17,500 should add further downside pressure.
Hold all other positions and related stops.
Best wishes and stay tuned …
Larry
