Friday, April 15, 2011

Greece Death Watch Update

The Greek 10 year bond went parabolic this morning when news came out of Germany that they would entertain taking haircuts on Greek bonds.  This means they will allow bonds to default and those that own the bonds (the banks) would be forced to take write downs on the losses.


Greece, Ireland, Portugal, and Spain cannot pay down their debt.  It is now a matter of whether the debt will be monetized (euros printed and bonds purchased) by the European Central Bank, just as the Fed is doing here in America, or if they will allow the debt to be restructured.

The process is fascinating to watch, and it will only take one domino to fall to bring us into the next chapter of the financial crisis. 

In the meantime gold and silver believe that there will be no restructuring and the answer will come from the printing press. (As do I)  Both metals rocketed to new highs this afternoon.

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