SGM Metals: Somewhere in Europe Lehman Bros. v 2.0 is Right Around the Corner!

June 27, 2012 - PRLog -- Uncommon Wisdom reports: [ Meanwhile, the list of sovereign countries and giant banks downgraded by major rating agencies is also getting a lot longer — 15 megabanks downgraded by multiple notches in one fell swoop ... Spain downgraded to the brink of junk territory ... India and its banks also risking a downgrade to “junk” ... plus Italy, France, the United States and even Germany on the chopping block for future downgrades!

Most important, the sum total of losses piling up in the portfolios of investors is expanding geometrically. Right now, Europe is collapsing before our eyes — banks flooded with withdrawals ... sovereigns paying through the nose for borrowed money ... both getting downgraded left and right.

But we still haven’t seen a Lehman moment — the outright default or failure of a sovereign nation or megabank. That’s when credit markets will freeze up, threatening a global financial meltdown. That’s when the big central banks of the world are likely to unleash their next massive round of unadulterated money printing. And that’s when you’ll see resource markets bottom and start to turn.

You should be able to pick up tremendous bargains in resources when they near a bottom. Then you should see a dramatic bounce that can produce unusually large profits in a relatively short period of time. And next you should get a bull market in resources that surpasses virtually any other in history.

First, the recent Greek elections have done nothing to stem the euro-zone crisis. Spanish bond markets are still crashing, and Spain has just been forced to pay the highest interest rates in euro history — more than DOUBLE its 2-year rate of just three months ago! Its 10-year bonds have also collapsed in price, driving yields past the red-light-danger level of 7%. When this happened to Greece, it was dangerous. But Spain’s economy is FIVE times larger than Greece’s and five times more dangerous.

if you think the fall of Greece and Spain are a threat, brace yourself for Italy’s demise. Italy’s economy is nearly FOURTEEN times larger than Greece’s — bigger than Russia’s, Canada’s or India’s.

Trigger #1 is mass withdrawals from banks. And right now, despite the supposedly positive results in the Greek elections, the withdrawals are continuing to spread — not only in Greece, but also in Spain, Italy and Cyprus.

Trigger #2 is a collapse of sovereign bonds. That can make it impossible for governments to borrow the money they desperately need.]

Can we finally accept that we are in the midst of the greatest financial crisis in our lifetimes? Can we admit that there is no simple solution to resolve this crisis and the answer most certainly doesn’t come from a policy change at the hands of politicos? While policy changes that clamp down upon the out of control banking system would do good for humanity in the long run, we have a major short term meltdown that will make the Lehman Brothers failure and the 08 housing crash in the US look like a walk in the park. This whole game of ‘keep buying stocks as they have never been a better buy’ will eventually lead to baby boomers getting their retirement cut in half again once the next leg of the credit crisis begins, this time ushered in by multiple failing financial institutions doing a nose dive in tandem. We have watched politicians being held hostage by the banks & forced to make good on their deal they made with devil in order to get into the political world originally and hand over trillions in as of yet uncollected tax dollars (don’t worry your grand kids will get the bill for most of this I’m afraid). Multiple generations of unborn Americans have been sold into debt slavery to make the banks whole only to watch the economy continue to grind lower, forcing the FED and the govt. to be increasingly more creative with their economic data reporting to artificially create some signs of movement in the economy.

If not for the funny accounting standards of the ‘Greatest Recession’ the world would have seen the US economy flat line and somehow we have been taught that this is a good thing compared to the other possibility which would have been an outright contraction of epic proportions. How have we gone from demanding more of ourselves by holding ourselves to a higher standard, as well as our political leaders, only to accept this mantra of ‘the lesser of two evils is just fine with us’? We are conditioned to view the circus of presidential elections this way as well and yet everybody seems to ok with this? This is why we are seeing a zombie nation funded by zombie banks. I say zombie nation because wherever you go these days people seem in the same state of mind they were a couple years ago as opposed to being in a state of mind where they are feeling the coming crisis and preparing for this eventuality. Everyone seems to be going about their business like there isn’t a continent on the verge of economic seizure across the pond that is just waiting to spread to our nation like a wild fire in Texas during drought season. Nobody seems to worry about the $2 QUADRILLION derivative bubble that threatens to wipe more than a few financial institutions off the face of the planet. This derivative bubble may have already touched none other than JP Morgan as they are mysteriously holding emergency press conferences to subject themselves to the court of public opinion for a supposed 1% loss of $2 billion as a result of some ‘London Whale’ making a dangerous bet? Just as a point of reference, a quadrillion is 1,000 trillions and a trillion is 1,000 billions and a billion is 1,000 millions and a million, well I hope you get the point. I feel like we have lost our sensitivity to exactly how much paper fiat money has been created to cover the banks losses and not a single dollar has gone to main street where the actual economy is, ITS NOT ON WALL STREET ITS ON MAIN STREET!

In light of this tidal wave of fiat dollars put into the banks in the name of ‘saving the economy’ can you imagine how exactly we aren’t supposed to be concerned about the threat of inflation? I can’t see a scenario where this much money can be created out of thin air and a human feel powerful enough to definitively declare that inflation is not a threat. Seems pretty inconceivable to me but hey if you say it enough times it becomes the truth right? That was Hitler’s propaganda ministers view point anyway, tell a lie enough and it becomes the truth. It’s time to stop buying the repeated talking points and falling for the repetition makes it real angle. It’s time for you to see the current threat for what it is, a crisis the likes of which we have never come up against as a species that is of a great enough scale that it could very well change the course of humanity in very profound ways. Can you imagine what the world would look like if these reckless bankers destroy the trust in the dollar enough that China is successful in replacing it with their own currency? Can you then imagine what the consequences of this would be on you and I and our life savings or our investments? Enough is enough. Establish your “Plan B” in physical gold & silver bullion and begin to create a hedge against these possible outcomes and take comfort in knowing you have a way to protect yourself from the global currency war between the FED & China. inflation is growing and may eventually turn into hyperinflation the same way our current recession may eventually turn into a depression. As a closing thought, according to a recent Federal Reserve report 25% of Americans have ZERO MONEY IN SAVINGS. Tick, tock.