We’re seeing some of those consequences begin to play out more rapidly in Europe.
Plainly put, they’re screwed.
Government officials throughout Europe are talking openly to the press about forcing Greece out of the EU and the Euro zone. This would force them to revert to the Drachma or adopt a new currency.
From what I’ve read, this would mean inflation of about 40% pretty much overnight. Basically, your assets are worth half what they were the night before.
The results of this talk is pretty predictable. Over the last couple days Greek people have withdrawn over a billion Euros from various Greek banks. Can you say Bank Run?
And today the European Central Bank said they’re not going to give any more money to a bunch of said Greek banks. Think they’ll last?
So now you’ve got a bunch of folks with Euros stuffed into their mattresses, waiting for Greece to be kicked out of the Euro Zone.
Remember what Ferfal said about Argentina? When the massive devaluation happened, Argentinians who had Dollars were fine. For a while. Sound a bit familiar?
Once again, history repeats itself…
Think this is limited to Greece? Think again. This cascades to Spain, Portugal, France, and more. Somewhere along the line Germany decides that enough is enough and leaves the EU before their citizens revolt. And rightfully so, since they won’t want to keep picking up the tab for all these soveriegn debt issues.
First Europe goes. I’m guessing this will actually give us a little boost here, as money flees Europe and the US Dollar becomes stronger. But math will catch up with us, and down will go this domino we call home. When? Don’t know. Inevitable? No, but almost.
Be ready. Time is short, and is getting shorter. Make sure you have what you need, and make darn sure you have assets outside the dollar. Metals or other, reasonably stable currencies.