Egon von Greyerz sees what I see.

A recent post over at King World News discusses what I have long said must be the eventual outcome as the Global Debt Ponzi works its way through the collapse phase.  There is simply too much debt and not enough productive labor has been created by the debt to pay down the debt.  Thus, the debt must default.  This is math, not opinion, not emotion.  When debt defaults on a massive scale it will result in an Elliot Wave 3rd wave which will arrive as a global economic shock.  Sheeple around the world (even those with Illuminati symbols on their web sites) will say "we never saw it coming".  It will arrive in such a way as to confound most people most of the time. 

That is what 3rd waves of the Elliott wave sequence are all about: a massive, sudden awareness by the herd that things are not what they were believed to be.  It causes everyone to head for the door at once.  The first few out can get out whole.  Those will be the ones standing near the door in the first place, the ones taking the least amount of risk and the ones who are holding money instead of assets.  Everyone else left in the game will lose a rapidly growing percentage of what they put into the game for every player that manages to get out before them.  By the time the room is half empty, those who already got out will have taken out with them all the value that was ever put into the scam. 

The remaining patsies will get fleeced of everything.  Their paperwork will indicate that they are still wealthy but the reality is that they will be nothing more than victims of massive government sponsored fraud.  They will whine and cry about how they lost everything but it will fall upon deaf ears because their debt will be with the government now that the government guarantees pretty much everything from pensions to bank accounts.  You can't collect from the government because the government has no money.  In order for the government to pay up it will have to tax people and people will reject the notion that they should work even harder in order to bail out those with lost pensions, 401ks, stock portfolios, annuities, etc. when most of the working class has none of these things. This is the basic nature of the scam which we call a Debt Ponzi Scheme.  The math associated with it requires it to end some day and to end in the fashion I just outlined.

Unfortunately, it is very difficult not to be affected by the debt Ponzi now that the government is the main player.  The government requires you to use their debt money and so anyone holding this fake money will certainly take a haircut in their purchasing power.  We are already seeing it with gas prices but this is just the start of the pain.  After the Great Deflation is over there will be a tsunami of money creation as debt again takes off on top of what is already a much larger monetary base.  Cost of goods will go up and salaries of all but the most productive workers will not keep up.  The only way to protect yourself is to keep a large amount of your personal wealth in a form that is completely outside of the debt Ponzi.  History teaches that physical possession of money metals is the best way to do this.  The goal is not to make a profit; that is for the con men and the speculators.  The goal is to keep the buying power of what you have already earned (a concept which is never spoken about by Wall St. con men or their government co-conspirators).

Truth is, a Ponzi scheme is bankrupt from day 1.  It is simply the belief that it is solvent and the desire to receive something for nothing (a behavior summarized by the single word, "greed") that keeps the participants coming back for more.  At some point it is clear that the whole thing is a scam and everyone runs for the exits at once.  Most people get screwed in the deal because the value associated with the scam has already been siphoned off over time by those who ran the game.  Ask Bernard Madoff if you are still fuzzy on the details.

von Greyerz's apocalyptic sounding view of the future is nothing more than a look back into history to see what actually happened before when the world put itself into this kind of position.  Those who forget the lessons of the past are condemned to repeat them.  Those who think von Greyerz is overestimating the carnage that is likely have clearly forgotten the lessons of history.  We have been conditioned to think nothing can go wrong...go wrong.. go wrong (tip of the hat to those who recognize that famous line from the old movie "Westworld").

When Spain and Italy default on their debt (and they both certainly will), then Germany and France will roll over too.  This is math and logic folks.  Spain is in a massive depression right now.  It's government is begging for more "loans" from the EU.  But the EU knows that any money it sends now is good money after bad.  So the EU has told Spain to jump through exceptionally painful hurdles if it wants any more loans.  As a result, the Spanish government is squeezing its people in order to comply because if Spain collapses then they are going to lose their jobs and perhaps their lives at this point.  They are in it to win it for themselves.  They have abandoned any semblance of honesty with the people.  Unfortunately, it will not matter.  Spain will collapse because the more austerity is forced onto the country, the greater of a depression it will slump into.  You cannot pay your bills if you are not working.  Thus, the more Spain complies with the EU austerity demands, the less credit worthy Spain actually becomes.  The EU knows this.  They do not plan on sending a lot more cash to Spain.  They would be best off right now just conceding default on the loans but they will play this game until it collapses.

Again, unfortunately, the EU and the Spanish government are breeding a new generation of terrorists.  This would be individuals who got screwed out of having a reasonable life by the con men and the moneymen and through no fault of their own.  They are enduring it for now but sooner or later they will believe they have nothing to lose and they will strike back in the only way that seems to have any effect: terrorism.  I don't hope for it but I don't ignore the lessons of history so easily as the con men running the show.  Look for high profile assassinations in Europe over the next 5 years.  It is coming because it will be seen as the only avenue for those who have been robbed of everything.  They will call themselves patriots and the establishment will call them terrorists.  Not unlike the U.S. a bit more than 200 years ago...

If you are running the show you can f$%k with all of the people some of the time and you can f$%k with some of the people all of the time, but you CAN'T f$%k with all of the people all of the time.  When you try to get away with that is when the people show the con men running the show who is really in charge.