Italy and Spain, of course. But France and Germany as well....

By now people all over the world are starting to get it.  Iceland was the tip of the iceberg.  Ireland was just window dressing.  Greece is a relative side show.  It has yet to default but smart people know that it's a foregone conclusion.  The big show is now on the stage as Spain (which Mish says is now in a "death spiral"), Italy and France start to slide into the abyss closely followed by Germany.

Yes, that's right, Germany.  The big export powerhouse of the EU.  Many people still haven't seen it because it is unfolding right here, right now.  Mish is now reporting dramatic reductions in exports over the last quarter for Germany.   Its getting to an economic blood bath and in fact it's starting to smell like late 2008 again wherein the global economy almost came to a full stop for several weeks.  Sales are just collapsing.

The fact that Germany is starting to slide down the tubes might be news for some people but not for Economati.  From my uniquely early view that the global economy is now one huge interconnected debt Ponzi gave me a vantage point where I could clearly see what was coming and why.  In fact, I posted several times (including this little gem) on the fact that France and Germany are as screwed as those they are wagging their fingers at.

Brace for impact, folks.  These things have a way of getting held back and held back until they erupt like Krakatoa.  As the economies go under, the banks associated with them will teeter and tumble.  There will be capital flight.  There will be bank runs.  Banks will go bankrupt en masse because banks that practice fractional reserve lending (which is all of them) are basically running a controlled bankruptcy at all times.  All that has to happen is for people to take their money out and the banks will be insolvent.  When that happens governments will bankrupt themselves bailing out their beloved banks without which there might be no market for government debt.

It's one big massive circular debt Ponzi.  At the end of the day the money of all countries will be severely devalued against gold and silver metal.  That is going to happen.  The longer governments fight it, the worse the backlash is going to be and the higher the metal is going to soar once the people panic in unison out of fiat currency into tangible goods. 

The end game for the US will be after all the foreign currencies get trashed that US dollars will be the last man standing.  When that happens, US exports will become very expensive to foreigners who will have to curtail the purchase of our stuff.  When that happens the US government will have little choice but to fire up the printing presses and debase the dollar even more.  This will drive a period of massive inflation.  First the other nations have to collapse though and the dollar will see renewed strength as the best looking horse in the glue factory.

People of Greece: if you have not already taken your money out of your banks and put it into gold then it's too late for you.

People of Spain: run, do not walk for the exits.  Your government is going to collapse.  There will be even more riots and massive inflation.  There is zero reason to leave any long term retirement wealth in an Spanish bank.  The fact that your wealth is Euro denominated means NOTHING.  Run into gold and silver as quickly as your feet will allow.

People of Italy: look at the rapidly rising interest rates of your government debt.  Your government cannot afford to roll over its debt at these high rates.  Your country is in the end game.  Get the heck out of your banks or get left holding an empty bag.  When the Euro disintegrates, gold and silver will still be useful in trade.  

People of France and Germany: I've already explained why you are only 1/2 step behind the PIIGS.  In short, your paper fortunes were built by selling exports to deadbeats who cannot and therefore will not repay you.  Your governments were in on the scam right there supporting your multinational corporations taking out massive loans in order to build production capacity to feed the credit-juiced exports market.  When the deadbeats default on you it will be a double whammy. 

You will lose the paper wealth you thought you had (think retirement funds, etc.) and you will be stuck with useless excess production capacity which requires regular loan repayments at a time when exports are not selling.  Your government will have to step in but many of your banks will collapse because they are leveraged up 40-80x (not percent, TIMES).  They are all Bear Stearns now just like the big US banks.  They will collapse.  It will end up debasing the value of any savings that you have stored in paper money or other fiat currency denominated assets.  The math of this will not be put off forever.  Get yourselves into money metals ASAP or go down in economic flames.

Tick Tick Tick...

PS, the dollar is not a good or safe long term resting place for your stored wealth.  It might look strong today but that is a Madoff-ism, an apparition.  You can get away with hiding your assets in dollar denominated investments for now but over the longer term the only safe haven will be monetary metals (gold and silver).