Connect The Dots: Bailouts, Bankruptcy And Gold
June 29, 2012
Tel Aviv, Israel
This week may very well go down as ‘connect the dots’ week. Things have been moving so quickly, so let’s step back briefly and review the big picture from the week’s events:
1) After weeks… months… even years of posturing and denial, Spain and Cyprus became the fourth and fifth countries to formally request aid from Europe’s bailout funds on Monday.
In doing so, these governments have officially confessed to their own insolvency and the insolvency of their respective banking systems.
Spain’s 10-year bond yield jumped to over 7% again in response, and many Spanish banks were downgraded to junk status by Moodys.
3) JP Morgan, considered to be among the few ‘good’ banks remaining in the US, conceded that the $2 billion loss they announced several weeks ago might actually be more like $9 billion.
4) The Federal Reserve reported yesterday that foreigners are reducing their holdings of US Treasuries.
5) Countries from Ukraine to Kazakhstan to Turkey announced that they have purchased gold in recent months to bolster their growing reserves.
6) Chile has joined a growing list of countries that has agreed to bypass the US dollar and settle all of its trade with China in renminbi.
7) China has further announced plans to create a special zone in Shenzhen, one of its wealthiest cities, to allow full exchange and convertibility of the renminbi.
So… what we can see from this week’s events is:
– European governments are insolvent
– European banks are insolvent
– US governments are heading in that direction
– Even the best US banks are not as strong as believed
– Foreigners are abandoning the US dollar and seeking alternatives
– Gold is money
These events are all connected, and the trend is becoming so clear that even the most casual observers are starting to wake up.
When you connect the dots, the next steps lead to what may soon be regarded as an obvious conclusion: the system, as it exists right now, is crumbling.
No amount of self-delusion can make this go away.
Rational thinking and measured action, on the other hand, can make the consequences go away… turning people from victims into spectators of the greatest bubble burst in modern times.
- It’s time to connect the dots (sovereignman.com)
- 17 Reasons To Be EXTREMELY Concerned About The Second Half Of 2012 (blacklistednews.com)
Posted on June 29, 2012, in AMERICAS, Economic collapse, Economic policy, Financial Crisis, History, North America, United States and tagged Bailout, Bank for International Settlements, California, Federal Reserve System, gold, Simon Black, Slovenia, Spain, Stockton California, Tel Aviv, United States. Bookmark the permalink. Comments Off on Connect The Dots: Bailouts, Bankruptcy And Gold.