• Over the weekend the Greeks voted no to the Eurozone bailout terms
  • The Greeks ars still hoping for a better deal, hoping to avoid austerity
  • The irony is that the consequences of their vote will bring on even more austerity, as a return to the drachma will result in a lower-valued currency
  • For example, pensioners will be paid not in fewer euros but drachmas that buy less
  • This will mean a huge collapse in the standard of living in Greece – far worse than the “austerity” called for under the Eurozone bailout terms
  • There is no way out without substantive reforms, particularly in smaller government
  • The markets are reacting adversely because they want to extend and pretend
  • The euro will be stronger without Greece, despite comments in the press to the contrary
  • Fears of “contagion” – other countries leaving – are unfounded
  • Greece is headed for hardship, but they will have to impose austerity from within they could rebound
  • Greece has a lot of potential, they have natural resources and a thriving shipping industries
  • The secret of the success of the shipping industry is that it is not taxed
  • The answer will be fewer taxes and less government spending
  • Short term, leaving the Eurozone will be negative for Greece
  • The Greek vote will be positive for the euro
  • There is still a flight to the dollar for safety over gold
  • The reason gold has not benefited from Greek instability is that the dollar is still viewed as a safe haven
  • More and more economic data reveals how weak the U.S. Eeconomy is
  • This week the Service Sector PMI for June contracted from 56.8 in May to 54.8
  • More and more people are looking for a rate hike in December rather than September, but they are still buying the narrative that interest rate hikes are feasible
  • This belief supports the dollar over gold
  • Our economy is weaker than other countries whose interest rates are higher
  • When are the dollar buyers going to realize that they have jumped out of the frying pan into the fire?
  • The dollar is the grandaddy of the fiat currencies
  • In light of continued weak economic data and further deterioration in the job market, the Fed will have to come out with another round of QE
  • That will be a game changer
  • All the economic news around the world is fundamentally good for gold
  • At some point the speculative forces that are restraining gold will not hold up
  • All that stands behind the U.S. dollar is faith
  • At one point people had faith in Greece, they had faith in Puerto Rican government bonds and in sub-prime mortgages – and then they didn’t
  • When we were on the gold standard, we had real value backing up our money
  • All that stands between us and economic collapse is the faith we have in a worthless piece of paper