by Bill Holter, Miles Franklin:
It’s going to happen… because it already is happening and mathematically it had to and has to. “It” being a complete breakdown of the financial system. Look around the Western world and you will see sovereign nation after sovereign nation with debt to GDP ratios bloated and above 100% of GDPs. This is unsustainable and can only last as long as interest rates remain low. Do you really believe that interest rates will never ever rise again? Please keep in mind that perversely, interest rates have been held down by central banks printing money (currency) out of thin air and using this money to purchase the bonds that the sovereign nation MUST sell in order to keep their doors open.
The fly in the ointment is Europe, or I should say Europe’s “structure.” The fact that Spain, Italy, Portugal and the rest cannot “print” their way to pay debt service and issue new debt is the detonation device. It is only a matter of time before another “Cyprus” emerges… only bigger, much bigger. Investors and savers have been given a preview of what is to come and the politicians have tipped their hands by saying that Cyprus is the template going forward.
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