One of the greatest challenges we face from a financial point of view is living in denial. We tend to believe that nothing will happen to us since we have yet to see economic chaos in decades here in the U.S. Other countries have not been as fortunate. History has plenty of examples: Russia, South American economies, Iceland, and Cyprus. In the 1930’s, we had our own crisis. People turned in their gold at the request of the President. Shortly after, the Dollar was depreciated in value, overnight.
We are once again approaching an economic reality of currency depreciation. No one is willing to set a date, but everyone who is not on a government payroll or in pension fund management is concerned about a sudden financial crisis. Central planners have no positive outcome available to them. The current question revolves around how to deal with the crisis and keep the populace from rising up in a dangerous fashion.
The problem banks of 2008 are bigger, at greater derivative risk, and have no remorse about the near meltdown in 2008. We are destined to see a day of reconciling the books of greed. Don’t be surprised when you wake up on a Saturday morning to a press conference outlining an “unexpected and unanticipated” event. They know how bad it is, they just don’t have a viable solution.
By the way, Walmart and Target are both showing bearish formations in recent days. The public is voting with its dollars being withheld from these giants. Richard Russell, famed investment newsletter writer, now has a 1530 target for gold. Interesting number!
And… Greece is now going to need a third bailout.