SGM Metals: Barosso "EU Crisis Is Due to Unorthodox Policies of American Capitalism"

June 22, 2012 - PRLog -- The Guardian reports: [ The opening day of the G20 summit was threatening to deteriorate into a fractious row between eurozone countries & other non-European members of the G20, notably the US, as EU commission president José Manuel Barroso insisted the origins of the eurozone crisis lay in the unorthodox policies of American capitalism.

As Europe's leaders came under intense pressure to act decisively to cure the euro's ills, & a campaign gathered pace to relax some of the austerity programs laying waste to countries with unsustainable debt levels, Barroso said Europe had not come to the G20 summit in Mexico to receive lessons on how to handle the economy. Asked by a Canadian journalist: "Why should North Americans risk their assets to help Europe?" he replied: "Frankly, we are not here to receive lessons in terms of democracy or in terms of how to handle the economy.

"This crisis was not originated in Europe … seeing as you mention North America, this crisis originated in North America & much of our financial sector was contaminated by, how can I put it, unorthodox practices, from some sectors of the financial market."

The European council's president Herman Van Rompuy, speaking alongside Barroso, said "We are not the only ones that are so-called responsible for the current economic problems all over the world,".

Germany's chancellor, Angela Merkel, is under pressure to soften her hardline stance on the austerity measures Europe imposed on indebted eurozone members, which the British chancellor George Osborne has claimed has killed economic growth. Barroso said he expected G20 leaders to "speak very clearly in favor of the approach the EU is following."

Spain's prime minister, Mariano Rajoy, is expected to ask for up to €100bn in eurozone bailout funds for Spain's stricken banks at a meeting of eurozone finance ministers in Luxembourg on Thursday, senior Eurogroup sources said.

"The world's waiting for the Europeans to say what they want to do," said Zoellick. He predicted a showdown between the IMF & Europe by the end of the summer in the absence of any decisive action. ]

Well now, it seems that the leaders of the free world are starting to turn on one another  & starting to point fingers. What is interesting is that these nations were all too willing to adopt the western fiat fractional reserve banking model to create the over leveraged expansionary export markets & derivative bubbles that allowed their banks to create trillions in profits over the years. But now that the consequences that come when you deviate from a sound money system that promotes stability & growth. Shifting towards a piece of paper that can be printed at a whim & inflated when desired, everyone is turning into a Boy Scout & pointing fingers at the US banking system. What is funny is that they are all complicate in this economic disaster & they all benefited from the loosening of banking & finance regulations as well as grey area financial instruments. These grey area investment tools have permitted the transition from a sound economy that made real goods & shifted the wealth creation towards the idea of exchanging financial instruments back & forth for the purpose of fee generation. This model worked well for a while, but once the banking system realized they had less oversight than ever before they became overly creative in their design process for these instruments & the outcome was a wildly varied market as far as quality of assets as more and more layers of derivatives came into existence.

Who is at fault is far less important than understanding where we are & where we might actually end up at this point. Worthy of attention is the fact that when the leaders of the free world begin to turn on one another you better realize quickly that you may be going at this thing alone & need to seek an outside option for safety. By outside option I’m suggesting that you look for ways to exit the Wall Street collateral damage zone & keep your assets out of harms way. This some argue is accomplished by simply putting your investment dollars into a bank account and refusing to participate in the stock & bond market game. While this does in fact limit your exposure to the stock market carnage that will surely swallow up millions of investment dollars in the next market downturn. But this does not remove you from the dollar devaluation collateral damage zone & when the banking masters determine that printing more money to keep the economy afloat is prudent you will watch your purchasing power diminish in the name of protecting the system. This diminished purchasing power is counter intuitive to protecting your net worth. Those who wisely put their capital into physical gold & silver bullion will able to see a rise in the value of their holdings that will offset the dollar devaluation.

The beauty of the precious metals, such as gold & silver, is that they are and have been wealth for over 6,000 years. Throughout history there have been hundreds of examples of man thinking they can outsmart the free market by substituting the real tangible wealth of physical gold & silver with a fiat paper currency that is nothing more than a medium of exchange.There is a Financial Renaissance amongst the common man of the world so to speak. I mean that the ‘commoners’ (those of us who don’t hold an MBA from Harvard or Columbia) are waking up to the fact that the working man has no control over what the crafty suits in Wall Street do to the stock market, what the politicos decide for us as far as new laws go, nor do they have a say in destruction of the dollar we depend upon for our everyday living. This revelation is steering people towards the idea that it may be smarter to ignore the flashy lights and excitement of hitting it big in the stock market and simply pay your bills and put your investment dollars into a monetary asset that is impervious to the corruption in the business/political world and actually benefits from the dollar devaluation of the bankers by rising in value as it has for centuries during these prior attempts to trick the common man out of their gold & silver wealth.

The problem is that there isn’t anywhere enough physical gold and or silver in the real world for everyone to simply stroll down to their local coin dealer and trade out their worthless paper dollars and walk out with real wealth. Sorry, but unfortunately its true, there just isn’t enough precious metals available for that to happen. This will soon enough become a realization as the markets become more inhospitable causing losses that exceed the Q/4 2008 housing crash and this will cause an influx of new buyers into the metals that will be shocked to find out the lack of available metal to service their needs. This will be when the mania phase begins as roughly 95% of Americans DON’T OWN PRECIOUS METALS YET! When this majority of the population makes their final retreat to the safety of precious metals it will distort the pricing mechanism beyond anything we have ever seen before. This meteoric rise will bring the rest of the ‘wait till the last second’ buyers into the market at record prices and the fear of not having real wealth preservation tools will encourage them to pay whatever they have to to get their hands on their life line in metals. The flood of paper dollars out of bank accounts, 401Ks, IRAs, Annuities, Hedge Funds and so on will cause a vacuum in these investment tools which will only exacerbate the losses that motivated this transition to begin with and the vicious cycle of the mania phase begins. Do you wait until you lose half of your portfolio again to make your move, or do you use history as your guide and make this move proactively? The current global currency war between the FED and China could very well turn our current recession into a nasty depression with inconceivable inflation. The choice is yours, make it wisely.