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August 2, 2011 is financial system D-day

 
U.S. Stocks Plunge on European Debt Worries- AP

Stocks plunged Monday after warnings about the finances of several European countries stoked fears that the region's debt crisis is worsening. The euro dipped briefly to its lowest level against the dollar in two months.

Euro zone debtors under pressure over new risks
By Kirsten Donovan and George Georgiopoulos

LONDON/ATHENS (Reuters) - Financial markets piled pressure on heavily indebted euro zone countries on Monday as investors worried about heightened risks in Spain and Greece and ratings agencies stoked new concerns over Italy and Belgium.

Italy, which has the euro zone's biggest debt pile in absolute terms, was hit by credit ratings agency Standard & Poor's decision on Saturday to cut its outlook to "negative" from "stable".

In an explanatory statement, S&P said it did not expect Rome to seek financial help from the EU or IMF due to the "absence of significant imbalances". The sheer size of its public debt effectively made it too big to bail out.

Government sources said Rome would bring forward to next month planned decrees to slice 35 to 40 billion euros ($50-$56 billion) off the budget deficit in 2013 and 2014, in an effort to reassure markets.

"We've kept things in order and the bases are all there for us to continue to do so," Economy Minister Giulio Tremonti said.

Fitch Ratings warned it may downgrade Belgium's AA+ credit rating if the caretaker government misses its deficit targets due to a lack of political consensus on a balanced budget. The country has not had a proper government since a general election last June but is enjoying an economic boom.

A weekend rout of Spain's ruling Socialists in regional and municipal elections raised fears of clashes over deficit curbs between central and local government as Madrid fights to avoid following Greece, Ireland and Portugal into a bailout.

The premiums charged by investors to hold Italian and Spanish 10-year bonds rather than safe-haven German bunds rose to their highest levels since January, at 186 and 261 basis points respectively, before easing slightly.

"The key point is that the crisis seems to be taking hold even of peripheral countries regarded as solid," said WestLB rate strategist Michael Leister.

"Sentiment is that there appears to be no end to it now Italy is being scrutinized by the ratings agencies."


Today, Euro gold climbed to a new all-time high at almost 1080. But here in the US, gold was under pressure all day "because of European debt worries". How can that be? Does the US not have debt worries of it's own that are far more significant than those in Europe?

Gold rose in Europe because of a weak Euro, and Gold fell in the US because of strong Dollar that was strong because of a weak Euro...all because of European debt worries.

Have you got that? Abbott and Costello could not be more clear if they were
talking baseball.

So, today, Gold rose in Europe because of European debt worries, and fell in the US because of European debt worries.

The question begs to be asked: Why then, hasn't Gold risen in the US on US debt worries? After all, the USA has
the Worlds largest external public debt. As a matter of fact, US external public debt at $14.3 TRILLION Dollars is 25% of the $59 TRILLION combined total Global external public debt. For that matter, why is the Dollar rising when the US has every intention of increasing its external public debt by as much a $2 TRILLION over the next 18 months?

Greek external public debt of $532.9 BILLION is ONLY 0.9% of the World total. By comparison, US total external public debt is a far bigger threat to the world financial system should it default than Greek external public debt is should it default. Yet Greece is considered a bigger threat because they cannot "print their way out of debt" in the manner that the US thinks it can by allowing it's central bank to fund the purchases of it's own debt.

Greek debt worries are but a pimple on an elephants ass. And the elephant in the living room, that continues to go unnoticed, is the US' mountain topping external public debt. Greek debt worries are a smokescreen, fueled by the illegitimate US debt rating agencies and the US financial news media at the direction of the US Government all to obscure the TRUTH about the US debt problem.

The US Dollar is not a safe haven from a Greek debt default. The US Dollar is merely the last domino in a daisy chain of default that will be unleashed if Greece in fact defaults on it's debt. Think of the US Dollar as the last survivor on the peak of a rooftop 18 feet high as flood waters 20 feet deep are cascading down the river valley to bury it.

How long will it be before investors shun completely ALL forms of fiat money, and instead run to the higher ground that Gold offers as safety from the tsunami of bad debt that is about to wash over the globe and drown ALL fiat currencies. What will be the tipping point that will spark a Gold rush that will push Gold and Silver prices to multiples of today's still manipulated discount prices?

The day the US Congress agrees to raise the US Debt Ceiling, will be the day that fiat money dies. Sometime between today and August 2, 2011, the global debt bubble will implode launching Gold and Silver prices towards levels not even imagined at this time. In 10 weeks or less, the Shit Is Going To Hit The Fan.

Is it just a coincidence that an across the board commodities take down was in progress as the Obama Administration suggested May 4, 2011 that the
US Debt Ceiling should be raised by $2 TRILLION?  Not likely.  A $2 TRILLION increase in US debt over the next 18 months could not be more negative for the US Dollar, and in turn positive for Precious Metals and all commodities in general.  This manufactured take down of the commodities markets and specifically the Precious Metals was launched to make cover for this announcement, and to bring prices down to a level where the likelihood of them jumping to new highs when the debt ceiling is officially raised is contained.

Just the "announcement" that there is an intent to raise the debt ceiling by $2 Trillion should have created a buying panic in the Precious Metals, and firestorm of criticism in the world financial press.  But there was already a buying panic in progress, so the manufactured take down in the Precious metals and commodities had to be launched to prevent the lid blowing off of them and sending the US Dollar to a premature death. 
The financial press yawned.

The world financial press was fooled into covering the false "story" of a bubble bursting in Silver and the CRB index instead of reporting on the Obama Administration's plans to increase the debt ceiling by $2 Trillion.  This false story was quickly followed by renewed "fears" of a debt crisis in the Euro Zone being reported by the western financial press.  Viola!  A $2 TRILLION increase in the US debt ceiling is covered up, the Dollar is propped up by a weaker Euro, and a march higher in the Precious Metals and Oil are halted temporarily.  A script worthy of Hollywood, all in an effort to delay the inevitable...the collapse of the US Dollar and the commensurate explosion higher in Precious Metals and commodity prices.
Will Raising the Debt Ceiling Bail Out the Banks, Again?



August 2, 2011 is financial system D-day.  Raise the debt ceiling, and the US Dollar implodes.  Fail to raise the debt ceiling, and the US Dollar implodes.  The countdown has begun.
 
It's The Debt, Stupid.