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En route
to San Diego, and following this morning’s news made a last second
change to my RANT topic. I was going to eviscerate the only person with as
much “financial blood” on his hands as Alan Greenspan –
“Quivering Lip” Bernanke – but that will have to wait for
another day. Perusing Zero Hedge, I came across the following article about
Portugal, “the next country to follow Greece out of Valhalla and down
to Hades’ gate.”
I always
enjoy literary references, and Greek mythology is my favorite –
particularly when speaking of Greece. However, this article relates the sad saga of the PIIGS, even sadder given the same problems are
present in perhaps three-quarters of the world’s nations, cumulatively
accounting for 99% of global GDP.
Portugal:
Another Significant Miss, And Another 140% Debt/GDP Case
What
initially drew my ire was the same “fuzzy logic” – i.e.
LIES – about debt ratios that have become prevalent in ALL aspects of
society since the turn of the century, involving corporations,
municipalities, and sovereign nations alike. Starting in 2002 with Enron, its
accountants Arthur Anderson and bankers JP Morgan, the culture of flat out
LYING about finances has become pandemic, and sadly will dramatically
worsen until the GLOBAL financial system collapses.
I’d
ask why it has become so difficult to tell the truth, but we all know
the answer. The cancer that is the global fiat currency system has infected
generations of bankers, politicians, and executive with no concept of
financial prudence, and – frankly – scant understanding of the
laws of basic human decency. The unchecked expansion of MONEY PRINTING has
grown so enormous; it has effectively destroyed the world as we know
it, likely for generations to come.
Like the
movie Fargo – referenced numerous times in past RANTS –
the scope of financial crime has broadened so significantly that for many,
the ONLY choice is to lie, and pray for “an
absolution that never comes.” As for Central Bankers, they KNOW they
have disemboweled their nations – and many others – and thus,
have resorted to the most dastardly of economic cowardice – FABRICATION
of financial data, OBFUSCATION of truth, and PROPAGANDA to misdirect the
populace from their true actions and intentions.
I
don’t need to rehash TPTB’s attempt to paper over the Greek
DEFAULT with such tools, or the immutable truth that what they have
done will spectacularly backfire, likely sooner rather than later.
Greece’s 180% debt/GDP increased following its
“bailout,” which did nothing more than roll forward its current
debt and add new tranches – replete with lethal “austerity”
measures designed to fail, enabling the ECB bankers to steal Greece’s
remaining assets, such as its 111 tonnes of gold.
Couple these “poison pills” with 25%+ unemployment, GDP
contracting at FREEFALL speed (-7.5% last quarter), widespread social unrest,
ongoing bank runs, and next month’s national elections, and my forecast
of Greece reneging on this deal and leaving the Euro by year-end looks
pretty astute.
When that
happens, we will see continent-wide bank runs of epic proportions,
particularly in the PIIGS nations next in line for execution. Greece will be
forced to utilize a massively devalued drachma, and subsequently will
be viewed as an economic leper by the rest of Europe. Greece already has the
highest gasoline prices on the continent, and with the “new
drachma” – which its new, unstable
government will have the ability to print AT WILL – hyperinflation will
immediately swamp the once-great nation. And then, it will be
Portugal’s turn…
Per the
opening commentary, Portugal, too, has “official” economic data
not even close to reality. Its “master” the ECB states
Portugal’s debt/GDP ratio at 111% – itself a level capable of
destroying most nations – but the reality is far, far worse. Per the
below data, total debt is $346 billion, compared to $208 billion of GDP
(assuming that data is not fabricated), for a debt to GDP ratio of
166%. Even this article – whose point is to highlight that 111% is
heavily understated – calls this ratio 140%; but as a 20-year,
CFA-bearing financial analyst, my math says 166%, putting it squarely in
Greece’s camp. It too, is experiencing plummeting economic activity,
debilitating unemployment, and a bursting real estate bubble, with
double-digit sovereign debt yields and soaring CDS prices. Not to mention,
later this Spring it – like Greece – has a debt principal payment
with not a chance in hell of being funded; hence, GREECE II.
PORTUGAL
Total GDP
$208 billion
Short Term Debt $ 99 billion
Long Term Debt $ 96 billion
Troika Loan $111 billion
Government Guaranteed Debt $ 16 billion
Government Guaranteed Bank Loans $ 24 billion
Debt to
GDP Ratio 140%
The
article also discusses the more than €1 TRILLION of LTRO, or Long-Term
Refinancing Operation “loans” given in November and February to
more than 800 European banks to recapitalize their balance sheets – ALL
of which has been re-deposited into the ECB to protect their zombie balance
sheets. The topic of this RANT is “fuzzy logic,” and no logic is
fuzzier than the belief that lending more money to bankrupt companies will
somehow mend their balance sheets, particularly amidst a GLOBAL
recession not experienced since the 1930s. These “loans” are
designed to be rolled indefinitely at sub-1% interest rates; in other
words, taxpayer-funded bailouts. Of course, such bailouts are
“funded” solely by MONEY PRINTING (as tax receipts are plummeting
worldwide); thus, in essence, the “tax” is INFLATION. Hence, this
month’s ALL-TIME HIGH GLOBAL GASOLINE PRICES.
Yes, the
“LTRO,” which together with its sister cancer on this side
of the pond – the Fed’s “swap facility” – is
executing the largest, most coordinated GLOBAL QE program of all-time
– not including MASSIVE QE programs in other major nations such as
China, Japan, and the UK (although I’m reluctant to call the UK
“major”). Think about it – a program that just added $1.3
TRILLION of debt to a continent amidst a comprehensive debt COLLAPSE, and we
are told this is go0d?
Ah, the
power of the PPT/QE/Cartel to prop up stocks and bonds while suppressing
PAPER PM prices, hoping and praying for that non-existent
absolution. How much longer will the game go on before the system blows sky
high? No one knows for sure, but I ASSURE you it will – and it
won’t take “a few years” to detonate, as TPTB hope
and most commentators assume.
Aside from
a “black swan event” – or better yet, the
“not-so-black swan” of Middle East WAR – I believe the catalyst
will be the U.S. economy, desperately propped by TPTB to maintain confidence
in the currency supporting all others – the U.S. dollar. From the
maniacal daily attacks on PAPER gold and silver, to the PROPAGANDA of
“recovery,” to flat-out FABRICATIONS of economic statistics like
the NFP employment data, “Plan A” is being carried out with all
the subtlety of a bull in a China shop. I don’t believe even they
expect it to succeed, which is why – with each passing day – my
sense of dread of what “Plan B” entails, whatever that may
be, grows stronger.
Election
fraud, the National Defense Authorization Act, the National Resources
Preparedness Act, and other blatant thefts of basic rights and liberties make
me fearful of what is to come, particularly with the WAR DRUMS beating so
loudly. I see lies, propaganda, poverty, social unrest, and the rise of
lunatics like Rick Santorum – he who wants to ban pornography –
and realize “something wicked this way comes.” Fiat currency is
the cause, fraudulent accounting a symptom, and inevitable war,
economic collapse, and hyperinflation the ultimate outcome.
PROTECT
YOURSELF, and do it NOW!
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