Since 2009,I’ve been warning that systemic risk remains high. However, from that timeuntil today, investors have been willing to bet on the US Federal Reserve (andthe world’s central banks) keeping a lid on things.
Until today.
Greece haserupted into full-scale, violent riots that could shut down the entireGovernment there. SHOULD this happen it’s the beginning of the END GAME forcentral bank intervention in the financial system.
Let meexplain.
The onlything that has maintained investor confidence since the depths of 2009 is thebelief that the central banks can continue to bailout/ intervene to control anyfinancial problem.
Remember, wenever actually “took the hit” we needed to take in 2008. The same junk debt remainsin the system (it’s just been hidden by loosened accounting standards). Thesame enormous derivatives time bomb is still ticking (it’s over $600 TRILLIONin size).
None ofthese problems were solved. None were even addressed. All the central banks didwas lend more money to the insolvent big banks. Well, that and damage theirsovereign balance sheets by taking on a ton of garbage debt (the Fed’s balancesheet is now over $2.8 TRILLION in size).
So in plainterms, the central banks took systemic risk that existed in the private sectorand allowed it to spread to the public sector.
What doesthis mean?
That thenext Crisis won’t just involve banks like Goldman Sachs, it will involve entirecountries (including the US) going belly-up.
We’re alreadyseeing it in Greece. That situation has made it very clear what happens whenyou combine public outrage with Government bankruptcy and systemic insolvency: SHUT-DOWN.
This IScoming to the US. And it won’t be long. Once the bailout wagon stops (first inGreece) the ensuing collapse will spread VERY quickly. The reason is quitesimple: Greece is the Bear Stearns of the Sovereign debt Collapse.
So buckleup, because it was only six months or so after Bear Stearns that the Lehmandisaster unfolded. Given the amount of leverage in the system today, we couldeasily see the issues hitting Greece today arriving at the US’s shores beforethe year’s end.
So if you’venot taken steps to prepare for the coming Crisis, you NEED To download my FREEreport devoted to showing in painstaking detail how to protect yourself andyour portfolio from the coming ROUND TWO of the Financial Crisis (round onewiped out $11 TRILLION in wealth).
I call it TheFinancial Crisis “Round Two” Survival Kit. And its 17 pages contain awealth of information about portfolio protection, which investments to own,which to avoid, and how to take out Catastrophe Insurance on the stock market(this “insurance” paid out triple digit gains in the Autumn of 2008).
Again, thisis all 100% FREE. To pick up your copy today, go to http://www.gainspainscapital.comand click on FREE REPORTS.
GoodInvesting!
GrahamSummers
PS. We alsooffer a FREE Special Report on the inflation situation in the US. This otherFREE Special Report, The InflationaryDisaster explains not only why inflation is here now, why the Fed ispowerless to stop it, and three investments that absolutely EXPLODE as a resultof this.
All in allits 14 pages contain a literal treasure trove of information on how to takesteps to prepare AND profit from what’s to come. And it’s all 100% FREE.
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