Best of the Week
Most Popular
1. US Housing Market Real Estate Crash The Next Shoe To Drop – Part II - Chris_Vermeulen
2.The Coronavirus Greatest Economic Depression in History? - Nadeem_Walayat
3.US Real Estate Housing Market Crash Is The Next Shoe To Drop - Chris_Vermeulen
4.Coronavirus Stock Market Trend Implications and AI Mega-trend Stocks Buying Levels - Nadeem_Walayat
5. Are Coronavirus Death Statistics Exaggerated? Worse than Seasonal Flu or Not?- Nadeem_Walayat
6.Coronavirus Stock Market Trend Implications, Global Recession and AI Stocks Buying Levels - Nadeem_Walayat
7.US Fourth Turning Accelerating Towards Debt Climax - James_Quinn
8.Dow Stock Market Trend Analysis and Forecast - Nadeem_Walayat
9.Britain's FAKE Coronavirus Death Statistics Exposed - Nadeem_Walayat
10.Commodity Markets Crash Catastrophe Charts - Rambus_Chartology
Last 7 days
UK Corona Catastrophe Trend Analysis - 2nd Jun 20
US Real Estate Stats Show Big Wave Of Refinancing Is Coming - 2nd Jun 20
Let’s Make Sure This Crisis Doesn’t Go to Waste - 2nd Jun 20
Silver and Gold: Balancing More Than 100 Years Of Debt Abuse - 2nd Jun 20
The importance of effective website design in a business marketing strategy - 2nd Jun 20
AI Mega-trend Tech Stocks Buying Levels Q2 2020 - 1st Jun 20
M2 Velocity Collapses – Could A Bottom In Capital Velocity Be Setting Up? - 1st Jun 20
The Inflation–Deflation Conundrum - 1st Jun 20
AMD 3900XT, 3800XT, 3600XT Refresh Means Zen 3 4000 AMD CPU's Delayed for 5nm Until 2021? - 1st Jun 20
Why Multi-Asset Brokers Like are the Future of Trading - 1st Jun 20
Will Fed‘s Cap On Interest Rates Trigger Gold’s Rally? - 30th May
Is Stock Market Setting Up for a Blow-Off Top? - 29th May 20
Strong Signs In The Mobile Gaming Market - 29th May 20
Last Clap for NHS and Carers, Sheffield UK - 29th May 20
The AI Mega-trend Stocks Investing - When to Sell? - 28th May 20
Trump vs. Biden: What’s at Stake for Precious Metals Investors? - 28th May 20
Stocks: What to Make of the Day-Trading Frenzy - 28th May 20
Why You’ll Never Get Another Stimulus Check - 28th May 20
Implications for Gold – 2007-9 Great Recession vs. 2020 Coronavirus Crisis - 28th May 20
Ray Dalio Suggests USA Is Entering A Period Of Economic Decline And New World Order - 28th May 20
Europe’s Coronavirus Pandemic Dilemma - 28th May 20
I Can't Pay My Payday Loans What Will Happen - 28th May 20
Predictive Modeling Suggests US Stock Markets 12% Over Valued - 27th May 20
Why Stocks Bear Market Rallies Are So Tricky - 27th May 20
Precious Metals Hit Resistance - 27th May 20
Crude Oil Cuts Get Another Saudi Boost as Oil Demand Begins to Show Signs of Life - 27th May 20
Where the Markets are heading after COVID-19? - 27th May 20
Silver Springboards Higher – What’s Next? - 26th May 20
Stock Market Key Resistance Breakout Is Where the Rubber Meets the Road - 26th May 20
5 Ways To Amp Up Your CFD Trading Today - 26th May 20
The Anatomy of a Gold Stock Bull Market - 26th May 20
Stock Market Critical Price Level Could Soon Prompt A Big Move - 25th May 20
Will Powell Decouple Gold from the Stock Market? - 25th May 20
How Muslims Celebrated EID in Lockdown Britain 2020 - UK - 25th May 20
Stock Market Topping Behavior - 24th May 20
Fed Action Accelerates Boom-Bust Cycle; Not A Virus Crisis - 23rd May 20
Gold Silver Miners and Stocks (after a quick drop) Ready to Explode - 23rd May 20
3 Ways to Prepare Financially for Retirement - 23rd May 20
4 Essential Car Trade-In Tips To Get The Best Value - 23rd May 20
Budgie Heaven at Bird Land - 23rd May 20

Market Oracle FREE Newsletter


How to Protect Your Wealth from the Greek Debt Crisis Calamity

Stock-Markets / Financial Markets 2010 May 05, 2010 - 07:59 AM GMT

By: Claus_Vogt


Best Financial Markets Analysis ArticleThe Greek government is bankrupt. Simply put: It has systematically spent much more than it could afford. Now the inevitable day of reckoning has arrived.

A 110-billion euro bailout package by other European governments and the IMF has been announced. But can this political rescue solve Greece’s underlying problems?

It’s Not a Liquidity Crisis, It’s a Solvency Crisis …

As was the case with the subprime crisis and the banks caught in a debt trap of their own making, Greece’s massive debt is not a liquidity problem; it’s a solvency problem! And a bailout package cannot solve a solvency problem.

However, the money will flow only if the Greek government adopts 30 billion euros worth of austerity measures that include slashing public-sector wages, cutting pensions, freezing public- and private-sector pay and liberalizing Greece’s labor laws.

Of course Greek officials have promised their EU colleagues they’ll make the radical reforms …

Riots have broken out over the tough sacrifices Greeks have been asked to make.
Riots have broken out over the tough sacrifices Greeks have been asked to make.

But the people of Greece are vehemently against these cuts, which isn’t a surprise. They’ve been told for years — no decades — that government debt doesn’t matter, that Keynesian deficit spending is a solution to any crisis. It’s even a sure road to prosperity! And now, all of a sudden, they’re supposed to start spending less?

Frankly, I don’t see it happening. And I don’t think anyone else does either.

So Let’s Play Kick the Can …

Do EU politicians and the IMF bureaucrats believe they can rescue Greece? Hardly. They’re just buying time for the euro, their 11-year old common currency, and the broader European Union.

After the 16 euro-region finance ministers met in Brussels on Sunday, European Central Bank President Jean-Claude Trichet said Greece’s plan will “help to restore confidence and safeguard financial stability in the euro area.”

But they know very well that Greece is not alone. It’s just a bit ahead of the pack.

Portugal, Spain, and Italy are ultimately facing the same possibility of bankruptcy. That’s also true for Japan, the UK and the U.S.

Policymakers around the world know it, too. So the only thing they dare do is kick the can down the road! Somebody else, somewhere in the future — hopefully in the distant future — will take care of the bigger, solvency problem.

For the shorter-term,

They Already Told You How They’ll Deal with It …

Fed Chairman Bernanke has made his pro-inflationary policy loud and clear.
Fed Chairman Bernanke has made his pro-inflationary policy loud and clear.

The politically easiest way is with inflation.

Just think about what Ben Bernanke said during a speech before the National Economists Club in Washington, D.C., on November 21, 2002:

“But the U.S. government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at essentially no cost.”

Since then Bernanke has delivered on many of the inflationary promises he made in that speech. Therefore I take his words seriously. And you should, too.

What would President Obama — or a future president — do if a situation like Greece’s rears its ugly head in the U.S.?

Implement a strict austerity policy? Cut spending dramatically and raise taxes accordingly? Commit political suicide?

No way, as far as I’m concerned.

Greece is just a harbinger of what’s to come. And when the time does come, governments all over the world will shift their printing presses into high gear to alleviate the pressure coming from decades of living beyond their means. That’s why in the longer term I expect the bond markets to crumble.

Historically, though, one asset has been used to protect investors’ wealth against unsound monetary and fiscal policies: Gold. And if you look at the chart below, you’ll see why I say gold’s secular bull market has a long way to go.

Gold Chart

Best wishes,


This investment news is brought to you by Money and Markets. Money and Markets is a free daily investment newsletter from Martin D. Weiss and Weiss Research analysts offering the latest investing news and financial insights for the stock market, including tips and advice on investing in gold, energy and oil. Dr. Weiss is a leader in the fields of investing, interest rates, financial safety and economic forecasting. To view archives or subscribe, visit

© 2005-2019 - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.

Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules