We Still Say No

As police search the home of the IMF chief Lagarde , the peeps form lines at ATM machines not only in Cyprus but across the peripherals of European Banks trying to get their savings before the next door closing. A collapse in CONfidence was always the game changer to be avoided for the fiat masters and whether this was a planned implosion or just a clumsy. arrogant move on the money masters does not really matter. We will never be allowed to know.  Its results are the same. The fuse is now lit and its just a question of time before the next crisis ignites.

The mid-March lift off for PMs appears to be taking place but be prepared for the pattern to shake you hard. The bigger prediction that should matter is the coming of warmer weather and the unrest that comes with it in these countries in crisis. 50% and greater youth unemployment in the peripheral countries of Greece, Spain, Portugal, Italy, Bulgaria etc……leave a lot of potential trouble developing on a Continent in shambles. Where will the next eruption come from? That IS the problem. Putting out fires has been confined to Greece but simultaneous meltdowns across the peripherals now come into play. Banking contagion may accelerate with the precedent set in Cyprus by trying to raid the depositors.

Even if Cyprus ends this crisis by closing a deal with the EU, the damage has been inflicted. IF the solution is to close the banks in question and make the “small” depositors insured “whole”, it still leaves CONfidence mortally wounded AND the big money destroyed……..Big money all over Europe is exiting and will continue to exit their deposits. Many of them did not get the big money by being stupid. Fool me once shame on you…..Fool me twice….Shame on ME!!

Analogies continue to crop up to the late 70′s and early 80′s period. I listen to many pundits on CNBS and Bloomberg comparing this situation and its potential resolution to that time period. I am here to tell you there is NO comparison. We had virtually no debt compared to now. We had the preeminent manufacturing country in the world. Our demographics were in much better shape. Our personal debt was miniscule. People saved and had savings to survive for months if they lost their jobs. Severe stagflation marked that period and if we entered that now, we would collapse. There is no room in budgets to withstand it. If we have to raise interest rates to stop stagflation this tiime…..then the entire system collapses with just a couple of percent. Its all mathematics. Its trouble folks. Big trouble. We had the rule of law then. We had a balance between the haves and have nots. We had regulatory bodies that had some restraint on the corporatocracy. But eventually through a carefully orchestrated program, the public was dumbed down by repetitive cliche phrases like trickle down and free market capitalism……..the rest is history. Greed and “want” won.