Greece ready for sovereign default; USD is the best looking horse in the fiat currency glue factory

Greek 1 year treasury debt had an interest rate of about 5% less than a year ago.  Now it is 97%.  There are several things to take away from this:

• The credit game is essentially the same whether you are an individual or a sovereign country (a country is just a large group of individuals).  Assigning special status to sovereigns as if they cannot default is a fool's errand best left to PhDs and Economic Academians.  The are the marketing arm of the con  no matter which country you are talking about.  If you keep borrowing long enough without paying anything back then sooner or later the pool of those willing to lend to you dries up until the only lenders left are loan sharks.  Note that this is the chart for 1 year debt.  Any short term debt that has to be rolled over right now will occur at the loan shark rate of 97% per annum.  Nobody can survive that kind of interest rate for very long.
• Greeks kept on borrowing in order to maintain a lifestyle that they had not earned even though they had foolishly convinced themselves that they did.  This is one of the evils of a fractional reserve money supply.  It temporarily boosts economies and economic outlooks before it pulls the rug out.  It gets people to believe in Fairy Tale Promises.  Because of these beliefs, they essentially spend their retirement money today believing that there will be more free money rolling in tomorrow.  These patsies (a technical term which is devoid of any emotional content meaning the target of a confidence game) will eventually figure out the hard way what a Wimpy Promise really means.
• The main driver of the debt based spending was the process of buying votes through the promising of entitlements.  Greek public employees voted in puppet governments who approved lavish retirement programs for public unions.  These Ponzi promises could not be funded by taxation and so they took on debt to do it.  This has been a globally used scam by scumbag politicians and it is now collapsing all over the United States as well.  If you read the link you will see the phrase that pays is "Ponzi Scheme".  Everyone is now using this term as I have always used it: in the context of being a technical statement of fact backed by math and logic and being completely devoid of emotional content.  Get used to it people, it's true.  The whole global economy is one big Debt Ponzi fueled by fiat currency and fractional reserve banking.
• The marginal players always get hit the first and the worst.  Greece is just the first.  The rest of the PIIGS will follow.  The press will call it "contagion".  It is not contagion but rather a series of well deserved individual defaults as the Wimpy Promises of larger states are called into question following the collapse of Wimpy Promises of the smaller ones.  The global economy is in fact already bankrupt by the fact that their banks are bankrupt and the "contagion" will just be the serial admission of the fact. 
• Economic collapse has a nasty habit of unfolding with exponential speed.  Who'd a thunk that the rates could go from 5% to 97% like that?  Who, I mean, besides those of us who have a handle on real economics (not academia crap) and who don't ignore history's voice on the matter.  Who today thinks the same can happen to the rest of the PIIGS, to Germany and France and eventually to every country which is running a debt Ponzi (including the USA)?  Reading the popular press, the answer is "not very many".  But the mainstream media was wrong in the past and it will be wrong again.  The writing is on the wall.  The less marginal players will take longer to collapse and the depth of their individual collapses will not be as bad as the smaller players.  Howerver, everyone in the world will see a return to living within their means before this crash is played out.  In the end it will mean a reduced standard of living for all of us.  That's the math of it folks.  If you want to live in New Age Dream Land and to ignore the obvious math then go ahead but the ostrich strategy is not going to help avoid the problems.  As Patrick Swayze said in Next Of Kin, "You ain't seen bad yet, but it's coming".  Things will get a lot worse before they can get significantly better.  The faster we let the free market sort this out, the happier we will all be.

Having said all that, all fiat currencies are relative.  The US admitted it was in trouble with the housing bubble long before everyone else did and the US Dollar took the early pain for that.  But now it's becoming clear that the US was not the only culprit in the grand fractional reserve lending scam.  In fact, of the major nations the sins of the USA might not be nearly the worst; those of Spain, Australia, Canada, China and the UK will all probably turn out to be bigger crashes than our own has been.  As a result of this realization, the beaten
down dollar could now be putting in a major bottom.  You can see how the horizontal green line was tested several times from the top before breaking down and then it was back tested from below and rejected once.  But then it put in an inclining double bottom and is now re-testing that resistance level from below.  Also, the recent trading action has included gaps as circled in blue which is generally a sign of strong interest in the direction of travel.  The collapse in Euroland will be dollar positive.

If the dollar breaks out at this point then expect stocks to get whacked because the only reason people are in stocks right now is as an inflation hedge even though we will likely have a good deal more deleveraging and deflation before the big inflation comes home to roost.  In this case, gold and silver could pull back sharply as well but the dollar and all other fiat currencies are like well-hooked fish.  They will have little bursts of speed relative to real money (gold) which pay out line but they are getting pretty damned tired and gold will eventually reel all of them in.  They are all losing ground over time and on average to the commodity money which is the only real money.  If the dollar can break out of this resistance level then kiss Dow 10,000 good bye to the downside.  The stock market is just another Ponzi in a world which is full of Ponzis.  Any significant dips we might be fortunate enough get in gold and silver are going to be buying opportunities.