Thursday, June 30, 2011

Greece is back to normal and Iceland Starts Anew

So the Greek Parliament voted 'Yes' to austerity. The markets knew last week that this was 99% sure. Gold has virtually stagnated for weeks. Not even Greece seemed to bother gold in its usual summer doldrums.

The new normal is back in Greece. We have the usual riots in Athens, the divided politicians, the large and increasing deficit plus the appeased creditors. All good and ready for another round of 'you can't make this stuff up.'

Or in the words of John McEnroe, "You can't be serious!"

Think of it this way. You haven't got any money and your mortgage payment comes up for payment next week. A 'knight in shining armour' (with the bank logo on his tin breastplate) knocks at your door and offers you a loan to cover next years payments. But you will have to cut down your costs and sell him some of your prized possessions. Your 52" TV would look good in the bank's tea-room and your pile of silver coins would be perfect collateral.

You agree; you don't really have a choice. Your kids now hate you and bust the place up and leave, taking their meagre savings, and the dog, with them. Your house is now not your own and you lose your legacy.

So with the Greeks. They have been frog marched to giving over their prized possessions. Who knows what these may be. Perhaps the odd tourist island. Perhaps national railways?

They lose their house and are now exposed to losing everything. So much for sovereignty and democracy.

But when you are in debt, you are slave to the master. You have no rights.

Unless of course you take another road. The Iceland Way.

Iceland have just voted (60% majority) to give the proverbial to the English and Netherland Banks. The same banks that bailed out the English and Dutch organizations that were exposed to Iceland's debt when it crashed in 2008. No carrot was large enough (even the prize of entry to the EU Community), for Iceland to agree to keep paying this onerous debt.

So now the taxpayers in England and the Netherlands are saddled with paying for Iceland's past stupidity; and they can do little about it.

Perhaps the way forward for Greece is to simply default (refuse to pay), leave Europe and bring back the Drachma and start all over again. They may be punished for years to come with unforgiving trade rules and other surreptitious economic penalties, but at least they would be masters of their own universe again.

Gold in New Zealand dollars: $1830.38 per oz
Previous all time high: $1955.10 per oz

Silver in New Zealand dollars: $42.25 per oz
Previous all time high: $48.58
per oz

Articles of interest:

Economic crisis in Greece could reach United States, IMF warns

See article here

James Turk - Summer Gold Trading Will Be One for the History Books

See article here

The Anglo-Far East Company
The Original Private Bullion Custodian
Your reference: an-001

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