Bye Bye Miss American Pie, eventually

I read today in CNN business that the Euro is destined to move upward because Germany and France will save Greece. Of course, they point out this is true as after the recent puppet show in Europe, it is clear the nice leaders of France and Germany can solve things. 

CNN thought only a devaluation in the U.S. would hurt the Euro.  This being CNN you can be sure it is intentionally incorrect as insiders are using CNN readers as suckers. 

I figured I would get another opinion, as this blog is about doubting consensus opinion.

Lehman Event in Europe (Greek Default)

Submitted by Phoenix Capital Research on 10/11/2011 11:15 -0400

So nationalization is now the name of the Game in Europe. Indeed, we've now seen three European banks nationalized in the last few days... and France has announced a plan to nationalize 2-3 banks "just in case."

If you'll recall, we tried similar plans in the US with Fannie and Freddie, AIG, and other firms in 2008. That situation didn't work out too well. Indeed, looking back on it, things really started to implode right around the time we started nationalizing companies.

Meanwhile Sarkozy and Merkel continue to make "plans" for what to do... The reality is they have no plans other than throwing money at Europe's banks and the PIIGS.

All they're doing is playing for time while they prepare for a Greek default. Indeed, German officials recently told the Telegraph that a "hard" default for Greece is coming which will feature investors taking a 60% "haircut" on their investments in Greek bonds.

Click here to read more about this.

In plain terms, we're fast approaching the "Lehman" event for 2011. However, this time around, instead of a bank going under, it's going to be Greece's sovereign debt.

Consider the Belgian bank Dexia which just went under... it only had 5.4 billion euros' exposure to Greek debt.

Well, French, German, UK and US exposure to Greece is north of $165 billion. And those same countries have $2.6 TRILLION in exposure to PIIGS debt in total.

So suffice to say that when Greece defaults (and it will) we're going to enter a very very interesting time. Indeed, this will be the Crisis to which 2008 was just the warm-up.

You see, 2008 was caused by toxic debts on private bank balance sheets. Today, thanks to US Federal Reserve and other Central Banks' moves, these toxic debts have moved onto the PUBLIC's balance sheet.

So this time around, the market collapse is ALSO going to feature the bond bubble bursting, sovereign defaults (including eventually the US), MAJOR bank failures (Bank of America?), bank holidays, government shutdowns, civil unrest, and food shortages. 

If you have yet to prepare yourself for what’s coming, now is the time to do so. Whether it’s by moving to cash and bullion, opening some shorts, or simply getting out of the markets altogether, now is the time to be preparing for what’s coming (remember, stocks took six months to bottom after Lehman… and that was when the Fed still had some bullets left to combat the collapse).