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Greece, WWIII, Bond Market Crash, Funny Money!

June 25, 2015

Let’s talk about the situation over in Greece first. There appears to be only two alternatives. One is for Greece to default and abandon the Eurozone system and the other is for the Eurozone to create a ‘all for one and one for all’ philosophy. The concept of a Hamilton Debt Plan where all budgets and accounts get pooled under a common treasury is a possible solution. Germany would need to provide the initial funds and support for this consolidated approach to work. Will Germany buy into this pooling concept…one budget for the Eurozone and one Treasury? This model may develop as negotiations continue!

The Greece situation must be resolved if confidence is to continue! The question is can a real solution be developed? We should know soon!

The other alternative is for Greece to default on its debt and request to become a separate nation with their own currency and budget. This would create initial problems for the creditors and for the Eurozone system but it would free Greece from their debt and allow Greece to rebuild over a 10 year time span. The paradox is that either alternative has positives and negatives which negotiators have not seriously considered. A temporary solution (that kicks the can down the road) could also be adopted. This provides no resolution to the debt issues but it delays any action or collapse for a few months. The ECB (Central Bank) could allow funding for the Greek banks and kick the can down the road for now!

The war of wills between Putin and Obama continues with no resolution going forward! Obama sanctions will not change the mindset of Putin!

The other huge problem now emerging is WWIII. The issue of Ukraine (now bankrupt) and Russian action to prevent the USA from changing the status quo is brewing and growing in intensity. NATO is adding more fire to the situation by creating troupe deployments on the eastern edge of the Baltics. This is provoking Putin and his administration to increase their defences and offences. At some point this tension will erupt into a major conflict and possibly WWIII. Missiles and bombs (including nuclear) could be used in a vain attempt to resolve this conflict of wills. Obama and Putin may choose WWIII as their only option! The situation is dangerous and it could intensify soon!

The bond markets are vulnerable to disintermediation and collapse! All our bit-currencies should be viewed as forms of ‘funny money’!

The other issue which is growing exponentially each day are country bond debts which can not be serviced without major restructuring. Some 11 countries are in immediate danger of default. Ukraine, Venezuela, Ecuador, Puerto Rico, Greece, Argentina, Grenada, Spain, Portugal, Italy, Ireland. The global bond markets could unravel in the coming days/weeks as more countries become stretched and unable to maintain their market share. The issues with Ukraine and Greece are the most urgent and nearly impossible to resolve without a default or some type of Hamilton Debt Model (pooling and consolidation). My sense is that a CRASH in our bond markets could precipitate a crash in our Stock markets!

This outdated graph is now much worse! Derivatives exceed a quadrillion! This weapon of mass destruction could develop in 2015!

The final issue of importance is all the ‘funny money’ now in circulation around our planet. This funny money consists of ‘bit-currencies’ which circulate within our computer screens as official legal tender. All these bit-currencies are imaginary/subjective units which can not resolve the issues or functions of real money. Real money must be tangible and be perceived as a ‘store of value’ for the longer term. Today, all our funny money (bit-currencies) are traded mostly via algorithms and speed of light computer transactions. All is within the computer screen and cyberspace is the environment for these ‘bits’ and ‘bytes’. This type of funny money can not resolve issues of value, price discovery, or a store of value. Expect a change in confidence to bring this house of cards down to reality (and soon)!

Funny money has replaced our historical legal tender (silver/gold)! This will lead to a crash in prices, debt, derivatives, values, and confidence at some point! Watch the confidence index for timing!

In conclusion, the Greece situation is pivotal to all these events and we could witness the strategy of these negotiators in the next few days. Will any real solution be found or will a mentality of kicking the can down the road continue? My sense is that some decision will be forth-coming soon and this may increase confidence for a time period or destroy confidence for our markets. The issue of WWIII is even more dire as this could lead to nuclear war down the road with millions of deaths. The bond and stock markets also could collapse over the next year or so and this means austerity or worse for many. The derivatives crash would bring the entire system down. All this is related to our funny money system of bit-currencies. Watch and pray as events continue to deteriorate. I am:

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