Two Financial Nukes Explode

Global Financial CrashBy Greg Hunter’s 

On Monday, I said at the end of my post, “I think someday we will “grow” our way out of the economic mess we are in but not before a very big fall.”  I didn’t think the fall would come the very next day–but it did.  Two monster nukes exploded on the financial landscape.  They are the surprise MF Global bankruptcy and the equally surprising Greek referendum on the second bailout package.  Kaboom and kaboom!!!  I see not one, but two giant mushroom clouds on the horizon, and destruction is headed our way.  Anyone underselling these two bombs is on some pretty heavy Prozac.  This is a turning point, and the turn is decidedly bad. It’s a global financial crash.

Two weeks ago, I wrote, “When European banks start failing, there is no way U.S. banks will be able to avoid being sucked into a vortex of default.   For anyone who thinks this crisis can be resolved with a pain free plan—forget it.  Welcome to the age of bank failures.”  (Click here for the complete post.)  I didn’t think MF Global, headquartered in New York City, would beat everyone to the punch.

MF Global is bankrupt for dealing in European sovereign debt.  CEO Jon Corzine was trying to make a quick buck with what are reported as “risky trades” and got a bankruptcy pie in the face.  There are allegations of missing money and possible criminal activity.  Considering this is coming from a former Primary Dealer in U.S. Treasuries, the Federal Reserve looks like it was asleep at the wheel of regulation once again.  Don’t forget the SEC and CFTC!  Where were the regulators?  There is no telling the amount of leverage and counterparty risk MF Global has, but we’ll be finding that out in the days and weeks to come.

And get this, for blowing up MF Global (a 200 year old company), Mr. Corzine might get a severance package of $12.1million!!  Let’s hope bankruptcy limits his pay to zero.  Heck, he should be paying money back to the company and its shareholders!   You wonder why the Occupy Wall Street people are protesting greed and corruption?  Even if MF Global does not turn into a Lehman Brothers event, it surely is one giant dead canary in the world’s financial coal mine. (Click here to read more on MF Global.)   

The second big blowup happened yesterday when Greek Prime Minister George Papandreou called for a nationwide vote on the most recent sovereign debt bailout deal.  Everyone expects this to completely kill the deal because the Greeks have figured out they don’t want to be banker debt slaves for the next generation or two.  Who can blame them?  If little Greece can cause a worldwide crisis, what will happen when Spain and Italy ask for the same deal–a 50% cut in their combined $3.4 trillion in sour sovereign debt?  How much leverage and counterparty risk is there if they, too, decide to default and go back to their old currencies?  That has to be in the many trillions of dollars, and the EU bailout fund (European Financial Stability Facility or EFSF) has reportedly about $350 billion left in it.  The EU wants to raise the total to $1.4 trillion, but so far, the fund is falling short.  Even if it meets its goal, that’s not enough to stop the dominoes of failing debt on a global scale.

Carl Weinberg, chief economist at High Frequency Economics, explained the EFSF this way in a research note on Monday.  Weinberg said what the EU was proposing was a “crazy scheme” and explained his position by saying, “To listen to what they say, EU leaders – at an all-night summit last Wednesday ‘increased’ the size of their bailout fund to 1 trillion euros without putting a dime of real money on the table . . . . Now they (EU Leaders) are keen to tap into resources that are not their own to fund this crazy scheme of guarantees, leveraged off guarantees to sell bonds and bank shares that no one may want to buy, (in order) to restore value in the banking system destroyed by other bonds that no one wants to own right now. This is a construct of Madoffian proportions,” (Click here for more on this from CNBC.)

“Madoffian proportions” indeed, and we all know how that ended.  I can come to no other conclusion than we are headed for a global financial crash.  It is just a matter of when, and these two financial explosions have pushed the time table into fast forward.

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  1. Zack

    A Little Shocked…I hope the economy gets better 🙁

    • Greg

      Me too!

  2. Jerry Frey

    Greg: You are certainly more knowledgeable than I on these matters, but have to hope you’re wrong. Tonight, while listening to Coast, I thought, “it’s about time to hear Greg USA on the show,” and there you were.

    • Greg

      Thank you Jerry! I hope I am wrong too but I fear I am not. This is big, very big!!! I hope you are taking action to protect you and your family.

      • robertsgt40

        Until someone is brought to justice by reinstiuting the rule of law, and abolishing the fractional reserve, privately held central banking system, it can ONLY get worse. We are at an “emporer has no closes moment”

        • Ron

          It is interesting to note that the Banking system is in the middle of everyone of these crises. The odd part is that nobody seems to be mentioning their criminal activities, nor prosecuting their fraudulent schemes… we have a “pink elephant” in the middle of the room that everyone chooses to not really recognize but which they have to adjust to and walk around.

          • Greg

            Spot on Ron!!!

  3. Alessandro Machi

    I think we are in a new economic paradigm shift, but the rich elite will not acknowledge the shift because it means they can’t keep endlessly profiting off of interest rate charges.

    What the world needs now, is just paying off debt, without additional interest rate charges, it’s the only thing that matters now. (yes, I slipped in and out of the song what the world needs now, is love sweet love, it’s the oly thing that matters now)

    Interest rate forgiveness should not be portrayed as a huge economic failure, it’s actually the opposite. Interest rate forgiveness is possible and plausible because of the huge buildup in everyday infrastructure all over the world.

    Even places considered “tribal” that don’t have uniform roads, sewage, electricity, or water do have internet communications to help them set their prices on their own products without being blindly robbed.

    Interest rate charges are old school. Simply paying back a debt, without interest rate charges, would calm the world’s economy and prevent the unnecessary economic collapse that appears imminent.

  4. Lew

    I have been reading about MF Global for a week now, and wasn’t surprised at the official bankruptcy story. What I have found surprising is an apparent lack of interest. I agree with you that this is an incredibly important story for the global financial entities (house of cards I say) and may be the actual tipping point many have been looking for (as a warning of structural collapse). The news in the coming weeks may come fast and furious.

  5. Bob-bob-bob

    The fact of the matter is : The financial nukes have NOT stopped exploding , so more are to follow . Meaning that before the year is out we more than likely will see a global meltdown and a world wide depression not unlike 1929. No other way to put this but that bad times are here now and worse times are ahead .

  6. Tony Rizzolo

    I mean no disrespect but you may have your facts wrong. In reference to the conclusion that “Anyone underselling these two bombs is on some pretty heavy Prozac”, I feel compelled to inform you that it is the optimists that do not suffer depression as frequently as pessimists and are a happier lot than pessimists.

    Optimists tend to have less of a handle on “reality” and ironically live happier and healthier lives. If you don’t believe me, look it up.

    There are many types of depression. Situational depression is often caused by “overbetting” the two bombs you speak of only to see the powers that be “put lipstick on the pig”. You and I know that they can only do this until people discover that The pig not only has no lipstick, it is leveraged 39-1.

    Prozac can help some people live with their chemically/genetically/biologically (sure that can include no sleep, exercise, bad diet etc.) but can also be a result of depression. Which came first? Even if we never know the whole truth, you need to differentiate “drugged”, delusions, hallucinations, faulty logic and stupidity from taking a medication for depression.

    • Greg

      I am not an optimist or a pessimist. I am a realist. I want to know exactly what is gong on with zero spin is either direction. This is big and it is bad that is a fact.

    • MasterLuke

      I’m glad i’m not an absolutionist or one who believes in absolute everything. Lets get “real” and not catorgize someone as a definition to try to spin the truth. I feel a little fox in the news with a sprinkle of c n n. This is 2011 not 2002.

    • Oldguy

      There’s an old story that is applicable here. It seems a pessamistic young man was put in a room that contained a huge pile of horse excrement. He was observed by psychiatrist thru a one way mirror. What they saw was the young man with his back tightly against the wall saying “icky pew, icky pew, icky pew” over and over. After a while he was replaced with an optimist boy who immediatly jumped on the pile and started digging. He was saying over and over: “With all this crap, there’s got to be a pony somewhere”.

      Now I know when I’m being fed a lot of crap and am proud to say that I have clean hands. Like Greg, I’m a realist.

      The news today says the referendum has been scrapped, and the bailout deal will be accepted….LET THE RIOTS BEGIN WITH NEW AND GREATER INTENSITY!!!

  7. jay

    greg. how will this effect the little man like me? should i consider getting my money out of the local bank? and my silver and gold in there safe?

    • Greg

      I would check my bank regularly at or and I would not have my eggs all in one basket. There will be upheaval and above all count on inflation.

  8. nm

    Now they (EU Leaders) are keen to tap into resources that are not their own to fund this crazy scheme of guarantees

    Whose resources? Which resources? Isn’t it all just paper shuffling/fake money?

    • Greg

      Yes fake money and money from the Chinese and hedge-funds and the like.

  9. Tired of Wall St Crooks

    They [Congress & the upper 1%] just don’t get it (why people are so p.o’d at congress, at banks, and why the Occupy Wall St action resonates with so many).

    Corzine, when in the Senate, was a MEMBER of the Committee on Banking, Housing & Urban Affairs. The committee was chaired by Sarbanes & Phil Gramm, with Chris Dodd being an integral player (and next chair) after Corzine left the senate. Prior to that, he’d been forced out of Goldman-Sachs by Paulson.

    Since he left the governor’s mansion in NJ, he’s overseen not only the attempt to make fast money on European sovereign debt, but also the raiding of individual accounts!!!! How illegal does something have to be before it’s criminal?

    In my working lifetime (and I am a good ways away from retirement), there have been three bubbles (the S&L bubble, the Dot Com bubble and the housing bubble) which have been courtesy not only of Alan Greenspan, but with a host of others like Corzine (Goldman-Sachs & MF Global), Phil Gramm (United Bank of Scotland, immediately upon leaving the senate), Hank Paulson (Goldman Sachs) – all contributing to the making of the rules that have contributed to the ruination of the world’s economy & the destruction of a middle class in this country.

    They’ve ensured they have zero culpability for any actions, and have also seen to it that the real criminals of the financial meltdown walk away from it scot-free. If anyone ever wanted a real-life example of having the fox watch the hen-house, then this is it.

    What’s happened on Corzine’s watch is criminal, period. How much you want to bet he’ll ever see any prison time?

  10. Henry

    Thanks for another informative write-up Greg.
    Here’s an interesting article that basically says the ruling elite are well aware that their policies will lead to economic catastrophe…

    • Greg

      Thank you Henry for the comment and content!!

  11. Art Barnes

    Greg, correct me if I am wrong, but isn’t MF Global just one more large crimestreet company that doesn’t make, manufacture, or produce any thing of use value? In my mind it has no intrinsic value except to manipulate the paper fiat economies of the world, something like Eron. Maybe what we need is to have more “actual” corporations in this country which actually make something we could use out here in improve our lives, go figure that for a new idea. China seems to have gotten it, manufacturing real goods in real time, old fashioned Yankee spirit.

    As for Greece I’m proud of the Greek people for wanting a say into 40 years of slavery for the sake of European fiat banks. Who ever said default is not an option? Who can say that if Greece elects to go back and print its own fiat currency that it would be worst off than what they are facing now? Maybe its time that our so-called leaders thought about what the people want to do before they march off and do what they want when they want to do it. In the US we (the people) are in my mind really never consulted and look where we are! They take us to war without a vote, manipulate our currency value, pass thousands of laws every year with impunity, tax, fees, regulations at every turn, and yet most Americans think the next election will solve the problems; insanity. Fiat money is on life support without a cure, its been good for the elite and I’m sure they are going to miss it.

    • Greg

      I can offer zero corrections.

    • Sean S

      I don’t know why anyone would be proud of the “Greek People” as they are a large part of the problem.

      1. Electing incompetent socialist Governments.

      2. Sustaining a standard of living, not founded on wealth creation and real GDP growth, but on borrowed Euros. High wages – especially in the bloated public sector – and low labour productivity is the name of the game. Everyone in the welfare state is happy to take the cash and not worry about where it all came from. It’s not sustainable and now you can see the result. Welfare states are just great (and people will keep voting for political parties that will favour them ) until you run out of cash and that is excactly what has happened in Greece. Now the Greek populace don’t want to repay the cash they have borrowed to sustain their unaffordable standard of living or to take the large cuts in Government spending that are necessary to live within their means. They just want the rest of the EU to pay for it.

      3. The European banks in particular have been encouraged by EU leaders to invest in EU country bonds and that is exactly what they have done. Imprudent and unwise as it has turned out but the banks did not create the problem. The over spending, big borrowing, incompetent European leaders did – in Greece, in Spain, in Italy and so on.

      “Good Politicians” as viewed by the voters does not = sound financial managers. Often the opposite is the case. These people are given the biggest businesses in the world to run and most of them could not even run a turkey lottery. They are great and spending(which takes no talent, anyone can do it) and good at inventing new taxes (anyone can do it) snd that is about it.

  12. Craig

    I am an optimist, but short term pessimist. The situation with the Central Bankers of the world has gotten compeletely out of hand. It appears the alchemists will crash down along with the Financial Markets. Yes, Krugman (uuuughhhh)is now touting complete armageddon, and I wonder if he has started to accumulate physical gold and silver. I can only trade mutual funds in mining shares and have gotten out due to the short term crash expected. As soon as the paper markets crash, bringing all stocks down, I expect to buy every Canadian and US gold mining stock I can find. Very soon I think. The March 2009 lows might just be in the cards again. Thank you for being a real watchdog. You, along with many others are my primary reading list because it is the TRUTH. Good luck Greg, I will need more luck as I have lost my job as a small business lender, trying desperately to find work of similar type. Looks like I am headed backwards for awhile. Oh well, it is time to buck up and get going.

    • Greg

      Yess Craig, “Buck up and get going!!” Thank you for your comment and analysis.

  13. PatriotRider


    Can’t argue with a thing you said.

    However, I want to add, that I find it interesting how EU leaders are now scared of allowing Democracy to happen, by having a referendum in Greece. They really are scared of the people.

    • Greg

      Spot on and that is galling to me!!! Greece is the birthplace of democracy!

  14. C Young

    Bingo! Thank you Greg for arranging scattered thoughts and premonitions into succinct rational reasoning. I already regret not transferring the remainder of our mutual fund 401Ks into credit union money market accounts. The remaining questions are: 1) Will meltdown occur before or after the 2011 shopping season? 2) Are there more tricks the Fed and other similar parties can be employ to delay the impact of MF Global and Greek bankruptcy to hide the meltdown? and 3) How painful will this debacle be?

    The theory goes like this: If we were to graph the negative effect on an economy of an catastrophic event over time, there is a maximum that the system can tolerate at any given time without erupting into meltdown. The Fed and other vested interest are stretching the time line to flatten the net negative effect to “just under” the meltdown threshold (known as kicking the can down the road). Are there more time stretchers in their arsenal? Can the holes in the dike be plugged fast enough as they exponetially increase in size and frequency?

    • Greg

      Thank you C Young for the comment and analysis.

      • Art Barnes

        Greg, you didn’t reply to C Young’s question(s) so I might add to C Young that the Fed can and will try to stretch it out with the printing of much expanded worthless money. It will work for quite sometime, but when you see inflation leap out of their control and interest rates rise then look out, its over.

        • Greg

          So sorry I do miss a few thank for addressing this for me. So sorry C Young.

  15. Don Robertson

    The increasingly widespread societal contagion is nothing to scoff at either.

    People today expect their own bailouts. The work ethic is gone. When people cannot pay their bills they whine to the government hoping (and often getting) help, in the form of much-more borrowed money plying the welfare state with food stamps, section 8 vouchers. and on and on…

    There is no accountability anywhere. People honestly believe that because the banks got trillions in bailouts, they should not have to suffer and pay their bills. Such rationalizations are widespread in our society.

    And that jackass, Obama, is leading the -dreamers- down the road to ruin, marching in a parade demanding class warfare with tax-the-millionaire proclamations, and mortgage modification program blah, blah-blah. Even student loans are thought a tyranny for which everyone needs a handout.

    Kids, your college education honestly isn’t worth one thin dime unless you want to become a bureaucracy-whore and work for the government or some stinking NGO.

    Where’s all the money coming from? LoL! They print it up, stealing from your wage, your savings and literally everyone’s future.

    The government thinks the answer is tax reform, whereby they can hang a bunch of new taxes around everyone’s neck so the bureaucracy doesn’t have to suffer cutbacks and pension modifications…

    OBAMAVILLE is sweeping the nation. Pretty soon, government is going to be telling us there is no money for this or that.

    In reality, there’s no money right now. Bernanke is printing away trying to sate the cry for cash…

    Oil is up, but there is no reason for it. Take a look at the YOY graph. The depression is in full swing now.

  16. g.johnson

    madoffian proportions indeed. compared to these multinational banksters, madoff was just a three card monte dealer in the alley behind the liquor store.

    we all get that the dollar and the euro are the same thing right? money created out of nothing and loaned into existence as debt. the interest on the debt being paid by the debtors creates wealth for the top tier. everyone else plays the boobs game.

    this bankster cartel is, far and away, the biggest criminal enterprise the world has ever seen. the justice department works for them as does the white house, congress, the cia, sec, fbi, dea, atf, state and local goverments (through anticonstitutional ucc code enforcemnt), etc., etc.. they run the u.s. military and are into international drug traffic, offshore slave labor, mutimedia, and, to a large extent, you mind.

    as we watch these large financial institutions go down one after the other, let’s remember that these institutions get a full asset stripping before they fall. their failure is not a sign that the elite is in trouble. just a sign that we the people are. looks a lot like the battle lines for armageddon are being drawn.

    so, time to find out who is too big to fail? the 99%? or the 1%

  17. rory

    Hi Greg,
    If you have time:
    1. Gold seems to follow the stock market recently somewhat. Market goes down/ gold price softens.
    Any thoughts?

    what happens when there are multiple write-downs of debt by other governments, as Greece has done?
    3. Who takes the losses
    4. What are the ramifications for inflation?


    • Greg

      Bond holders take the losses but most of the losses are being absorbed by taxpayers and money printing. Inflation will rule the day so gold is the perfect play. Gold does well in the extremes in high inflation and deflation (ie. bond write downs.)

  18. cowboy

    Have not commented for a while but still read and appreciate you keeping us aware of the many tricks that our government uses to try to hide the truth from us. Here are a couple of events that I have encountered lately that I think everyone needs to know. A few years ago I opened accounts at Canaccord Capital and Royal Bank Of Canada both in Vancouver and in Canadian dollars to diversify out of US dollars as well as storing some gold up there. 24 hrs ago my wife called RBC to wire transfer some money to APMEX to pay for some gold I bought yesterday morning. They told her US citizens could no longer wire transfer money from Canada to US unless they filled out forms that were required to comply with new US laws and it had to be done in person in Vancouver. I have a great wife and partner. So she bought an expensive plane ticket, drove 3 hrs to airport and called me at 2:30 AM to say she was there after going threw all the inconveniences of flying . As I type she is at RBC and I hope all goes well. A few months ago a similar thing happened with our account at Canaccord. As I was reading my monthly statement, I realized it was very different. Called and asked my brokers assistant what was up. Very nonchalantly, she said all US citizens accounts had been moved to a US brokerage firm to comply with new US laws but my broker would still oversee it. Remember I opened the account to get funds out of US. I had them sell apx 80% of my stocks and transfer the cash to my RBC account back in Vancouver. In both instances I was not notified in advance of the moves. Just pointing this out to show how fast and concealed our government works to keep us from avoiding their mischief. Someone once said,” It is dangerous to be right when your government is wrong.” How true that is today.
    If this is too long or you don’t think meaningful to your readers, I will understand.

    • Greg

      This is a scary story. This is a form of capital control and another sign of desperation and of things to come.

  19. Craig

    Second post.
    Have a plan everyone.

    I have been expecting this for 2 years. First year, was able to double 401K trading miners. This year, with the now aligned Big Government and Big Bankers aka (JPM, WF,C, MS,GS)we have successfully played to a draw on the miners. I expect soon these wheels will begin to move in my direction as they will be very distracted with their bond holdings. If I can time the thing right again (potential windfalls).Own enough silver eagles to get me to a safe haven in Southern Hills of Virginia, near Thomas Jefferson summer home.God Bless my father,who has been thinking this thing through for years. He has a PHD in Economics from a school of thought that no longer exists in most academic upper level universities that feed our large bureacracies. We talk all the time, I was able to get him convinced to buy miners a couple of years ago.My fathers dream is located in Forest, VA and supplies plenty of deer so there is plenty of food and plenty of land, and a country atmosphere with neighbors who help each other out. Anyhow, I think it starts soon. I really would not want to be 30 miles from any city such as DC, Balt, NY, Atlanta, Chicago, Detroit, LA, ….). I lived right off of Pennsylvania Ave just outside the district of Communism, 1n 1968. We thought it was bad then, but I do believe in the short run, the numbers of pissed off, downtrodden people today will make that event seem miniscule. Good luck all.

  20. Craig

    As a reference point, 3/2009 the ^xau/Gold $ per oz went to .090901. The crash might bring it close, but after everyone is selling everything to cash, I will be getting very trigger happy. We will have to see, the Sinclairs, Sprotts, Fergusons, camp of thought believe the market will begin to asset rich stocks from paper lions. I tend to believe the onslaught will be similar to other crashes, whereby all assets get liquidated on sale. Forced Liquidation as sellers will want cash/gold/silver. After such onslaught a period of enlightenment will occur that miners, and other asset rich companies will follow a V shape recovery to the moon. Just hope I can cathch the bottom of the V.

  21. ONTIME

    Corzine should have been driven from office long ago and if he has to suffer a number of lawsuits which deprive him of his ill gotten fortune then so be it…this time he bet on the wrong horse and there is no politics to rescue him.

  22. Jmac

    I appreciate your analysis, which appears to be neither liberal oriented, whining about conservatives nor conservative oriented, whining about liberals. Everyone, including a whole lot of liberals and a whole lot of conservatives spent decades bending the rules, breaking the laws, and feeding at the trough. The more we can get out of the infantile left/right finger pointing game and get down to taking responsibility for the monstrous mess that we all participated in creating, the better.

    • Greg

      Thank you Jmac.

  23. Christopher de Vidal

    Greg: So are you saying this is it? Or that there’s still a small possibility of kicking the can a little further?

    • Greg

      Christopher de Vidal,
      There is always the possibility of kicking the can a little further. That’s what Ben Bernanke did today didn’t he. He said basically he would print money for more bailouts if things got bad. Well, there is no “IF” thinks are bad and these two stories prove it without doubt.

  24. Herman Gerbils

    So first we have a financial “reform” bill passed on a Thursday and bank stocks rise on the following Friday. Then Carl Levin calls Wall St execs on the carpet in a inquiry peppered with perjury landmines and the Ceo’s step on everyone, a 700 page report is produced and nothing happens. Now if Corzine is allowed to walk and the losses shoved off on the taxpayer, how much more proof do you need that the whole system is rigged and rotten to the core. You know, the 1% are next to be fleeced by the .001%, there is little left to steal from the middle class, and the real irony is they don’t see it coming.

  25. Randy

    Not really a big surprise. I’ve been watching all this as much as the rest of you. The question really is, how well prepared are you to handle the fallout? I expect MAJOR changes to life as we know it and more so than “The Great Depression”. I foresee two outcomes: 1) more control pushed on us by Big Brother, or 2) chaos. Either scenario will look ugly…..

  26. Mark

    It’s funny how the stocks jumped after Europe announced their bail out and how the MSM praised it. But now the DOW has dropped…What, the party is over? What a nightmare! I just hope somebody can get figure this problem out soon.

  27. Dave

    The bottom line is that the west’s equity has been carefully sucked out and redirected to investments in the east. Tagging right along behind the dollars were the jobs and neither is coming back. As the boomers retire they are beginning to realize that the system is not going to nor did it ever plan to finance their retirement. Our system is dead. It has been for some time. The brain knows this and the rest of the body is realizing it. For those of us that don’t believe this just don’t have the capacity to understand it. If people are upset because they work hard for a living and feel it is unfair that others get government help and don’t work hard I would suggest you get prepared for when the government stops helping at all. It is already broke. How long will societal protection systems remain in place when it can’t pay people to implement those protections? How long are foreign nations going to finance our war machine? I believe as long as it takes for our military to wither down to nothing leaving us ripe for picking. I am investing in me for the best returns the immediate future has to offer.

    • Art Barnes

      Wow, you got it so right. If the upper middle working class complain how bad it is now just wait till the guberment quits paying the lower class not to work, they will be camped out on their freshly mowed lawns.

  28. George

    Thanks for bringing this to the forefront. This will probably looked back as the starting point of the “Greatest Depression” and the official decline of America’s standard of living.
    Welcome to America: the newest third world country.

    • Greg

      Sad but on target comment! Thank you man!!!

      • Art Barnes

        Greg, new T Shirt: Late Great American Middle Class.

  29. Sean

    In reality, none of this comes as a surprise to the power players who are behind policy and behind the recent failures that have brought us to this brink. It’s simply a fact that this was planned and expected.

    The smartest people in the room – economists and industry insiders with Harvard, Yale, Princeton, and other pedigrees who are at the helm of this sinking ship – did not “miss” what many of us have been expecting and predicting for years. This isn’t an accident. And it’s not an example of failed policy. That’s a misnomer.

    Again, the smartest people in the room could easily figure out what some of us “laymen” have expected for a long time. Think about it before you accept that these are failures based upon greed etc. These are not failures. In the eyes of those who set these circumstances into motion, they are successes.

    Three things to keep in mind are:

    1)the greatest monopoly for a finance capitalist is the merger of government and finance where the financier is gaurunteed (via legislation) a percentage of taxpayer income in return for financing social programs,

    2) the American people would never accept a socialist system unless brought to their knees and desperate for any solution that provides food and shelter for their children,

    and 3) as per Marx, you must create enmity between the bourgoise (the 1%) and the proletariat (the 99%) if you want a true people’s revolution to drive the economic changes necessary for a socialist (communist) system – that places the financiers at the profit end of the central banking system.

    If you were a globalist financier with the ultimate goal of establishing a global economy under your control, you first need to clear the decks and get everyone on the same page. Make it a social revolution and replace the leadership with folks who will use government to act on behalf of the people. But you need to create economic failure and you need to create distrust of national leadership if you want to step in as a “trusted” third party and offer something “better”.

    After the Soviet Union colapsed, former President Mikhail Gorbachev spoke in Europe and declared that what was being experienced was the emergence of “the new Euro-Soviet” that would result in a blend of European and Soviet style governments. In that same timeframe he was teaching political science to future US leaders at Georgetown.

    That is the field that is being sewn today. People may call me a conspiracist or any other derogatory comment but reality is that they called us that back in the late 1990’s when we predicted the last five years. Planned economic failure by the smartest people in the room, on behalf of those who will wait for the population to demand true change. Americans won’t buy an overt socialist solution today but many will after they’ve experienced complete economic devastation. To those who are orchestrating the economic playbook, this period of history is experiencing natural growing pains as the world elite re-directs humanity towards a planned future that they have determined is in our best interest.

    • Denarius

      Thanks, Sean, for so succinctly summing up what I have learned over this
      last decade, suspecting it for many years before. The Hegelian Dialectic will
      continue to work its wonders as long as human psychology remains the
      same, imo.

      Continuous thanks to Greg for reporting and analyzing so much of what
      is impacting each and every one of us on a daily basis, and especially for
      hosting so many intelligent, informed, and generous commenters.

  30. Marcel

    ‘We are headed for a global financial crash.It is just a matter of when.’

    At the same time all of this is happening on the economic stage I’m reading numerous reports focused on Iran today from the global war stage.
    Major wars have often been used to distract from collapsing homefront economies.
    It looks like the two ‘economic collapse and a nuclear WWIII’ will go hand in hand as you inadvertently tied the two together.

    ‘Two monster nukes exploded on the financial landscape.’

    Russia and China will not sit out Iran/Syria as they did with Afghanistan,Iraq and Libya and as reported in the Washington Times last week Iran already has nukes.
    It looks like we are headed for the real thing

  31. Harold Bell

    Mushroom Clouds? Are you kidding! MF Global was the brain child of Goldman. It was not a part of Goldman because they delt only with derivatives (high risk gambling), of which; is nothing short of absolute gambling. Derivative dealers should all be shot. They steal (play with your money) on a 100% speculative profolio with your good graces. What about Greece? Jesus- this is not rocket science! Most all their real property is not registered so how the hell can you tax it! The upper class hasn’t paid taxes for years and to slam the pawns with a tax and electricity invoice in insane! This means your DI (Disposible income) figures would drop 50%, and when you read what the bail out reduction entail they would be better off to go bankrupt, and this is what they will do very soon. It seems the leaders of the EURO have no business acumen! The fall of Greece is in the books so I suggest you all get your porfolios into damage control very, very soon! Good Luck!

  32. superjibby

    Solid article.

    I’ve spent many years as a(CFP)in this very controlled – and anything but, free market – industry. My health (and conscience) pushed me out!

    Now with the EU an IMF (to hold back the next Greece payment), until the referendum…you can rest assured…that Greece won’t make it that long: their formal default is soon. With this, they’ll be a triggering of(cascading events); some I believe, will be horrific financial (and indeed systemic) surprises.

    One will likely be the copycat default of other nations. Some might surprise people. Even Mexico is a possibility. Remember, they’ve done it twice already in this generation…why not again? All – the – more likely with their exports to the US falling; their oil revenues falling; and now, their yields on their sovereign debt really starting to move higher: all of which conspire to bring economic havoc to a nation.

    So watch out below! When the first two sovereign nations’ debts default, it’ll be touch and go…but when the third goes…you’d need to be in daily (truly) your prayer closet.

    Blessings to you.

    • Greg

      Thank you for your comment and analysis. It is good you came forward to warn people. This is real and the pace is picking up.

  33. Shawn In San Jose

    MF Global wasn’t the shocker that G-Pap pulled on Skarzozy and Merkel. But I agree, both are bells of doom tolling the end of the game. The only question is are the bells for half time or then actually final warning.

    Have you seen the latest regarding MF Global? I’m hoping this time around there is enough public awareness and anger to put someone in jail.

    • Greg

      Shawn In San Jose,
      Jail! I’m for that!

  34. In4mayshun

    While I appreciate the time and research you put into the article, I feel it is a little over dramatic. At first you equate the bankruptcy of MF Global to a financial nuclear explosion, then you reduce it to a canary in a coal mine. Well which one is it? I think this is why so many main stream individuals dismiss alternative media as dooms-dayers, always claiming the sky is falling. To a point this is accurate. Anyone with a brain can see that our financial system is slowly crumbling, but it could take 10-20 years for this thing to play out. Meanwhile, you have everyone with a blog forecasting the next financial apocalypse.Pretty soon, no one takes any forecast seriously.

    I’m not trying to criticize, just saying…something to think about.

    • Greg

      I probably did not explain the math really well, but the bailout fund they have right now in Europe has about $350 billion in it. The combined sour sovereign debt of Spain and Italy is $3.4 trillion. My gut tells me you can multiply that $3.4 trillion with about 40 to 1 leverage. That is a lot of trillions, and both of these countries are going to follow Greece’s lead and default too. It’s a better deal for them. How will that affect the rest of the $600 trillion in derivatives the BIS says that’s out there? Some say the true total is more than $1 quadrillion. (FYI, over-the-counter-derivatives have no standards, no guarantees, no regulation and no price discovery mechanism. There is no public market and zero transparency. (Who’s got what and how much is this really worth? I don’t know, and neither does anyone else.) This is why they call this stuff “Dark Pools” and why Warren Buffett called OTC derivatives “weapons of mass destruction.” Mortgage-backed securities, credit default swaps, interest rate swaps are a few of the names. Insurance companies, banks, brokerages and retirement funds are a few of the places that are chocked full of this crap. When this goes bust lots of people are going to be poor just about overnight. I am not being dramatic but warning about a real life changing event coming to the world. I pray I am wrong. Thanks for your email. I am not trying to give you a hard time. I am just giving you some background.

  35. Bob

    I don’t know if this is true, but I read this post were the the guy said the Greek debt was 2% of the EU countries debt.

  36. Meatdawg

    As usual another good (if too short) article from Greg. I agree with Greg these are two very big events. But don’t count on the Greeks voting on any sovereign debt bailout deal. It ain’t gonna happen! G-Pap is just trying to buy time with a false promise to the Greeks to make them think that they actually live in a free county. G-Pap is just stalling so the Powers That Be (PTB) can get their ducks in a row for another CIA/MI-6/Mossad staged coup. Here are some things to look for.

    1) False-Flag(staged) terrorism attacks by the aforementioned Intelligence agencies as an excuse to declare Martial Law.

    2) You’ll see soccer stadiums being turned into ad-hoc concentration camps where dissident/activist Greeks will be corralled by the hundreds of thousands. Tens of thousands will be killed outright. Many more will be tortured, while tens of thousands more will simply “disappear” never to be heard from again.

    You’ll likely see a similar scenario that happened in Greece in the early seventies (late sixties?) when the CIA staged a similar “Colonels Coup” that plunged Greece into a Fascist Police State that lasted for decades.

    I could be wrong and I hope I am. What are some of the clues to look for if I’m right. If the markets (American and international) stabilize. and even rise, after a short freak-out period then you know a banker-coup is in the works. The Big Boyz who do most of the trading either know now or will know in the very near future that “the fix is in” and they’ll blithely go about their daily trading business until it is time to pull the plug.

    Is it all dark? No, there could be a counter coup where a large chunk of the military and police side with the people and genuine freedom is restored bereft of enslavement by the London/Wallstreet Banksters.

    But, it could go sour if the clash isn’t decisive and Greece is plunged into a bloody Civil War. If so then all bets are off. What happens after that is anyone’s guess, and it won’t be good.

  37. Dave Krall

    Nothing to worry about. We have the best and brightest taking care of things in the Congress, the administration and at the Federal Reserve, both in Washington and New York. Rest easy.

  38. Sreeram

    Hi Greg,

    I always appreciate your insightful articles and your penchant for telling the facts as they are…

    As a “Common man” how should I protect myself – Are gold ETFs relatively safe or do we need to plan for real gold – I have avoided buying real gold due to the issues with storing and protecting it..

    Again, appriciate your insights!


    • Greg

      DO NOT BUY gold or silver ETF’s. Buy gold and silver coins and keep them under your control. I do not sell gold or silver coins but I wrote a post about is a few months back on how and what to buy. Here’s the link: You can also find it under my Pic that is titled “Learn How to Buy Gold and Silver.” Good luck. let me know if you have some questions.

      • Sreeram

        Thanks Greg,

        Another informative article. I can transfer my personal brokerage funds to physical gold but I cant do much with IRAs and 401Ks – ETF is the closest I can get to a bullion.

        Again appreciate the details!


        • Greg

          You can pay the tax and penalty and claim your IRA money. Other people who have written me on this site say they have done just that and are sleeping nights. If you think the brokers are safe, just look at MF Global. Do you think they are the only ones with 40 to 1 leverage? If you are going to make a move, please make it soon, and DO NOT BUY GLD or SLV. They are not gold and silver. You are kidding yourself if you think they are. Good luck and God speed.

  39. norcar survivor

    Thank you Greg for keeping everyone aware of just how erratic the pulse of our financial system is. We are beyond hiccups and are into Heart Arrhythmia. Nothing is sure in this or any economy anywhere in the world. Where is the main stream media on this. I agree that Iran would make a wonderful sideshow to distract most of us from noticing, but for the over 9%(including myself) of non employed citizens, this news is very important. I am especially concerned with Cowboys story about his Canadian investments being repatriated without his consent or knowledge. These are scary times and those of us who follow your site really do appreciate every effort you make and are shouting from the roof tops to try to get more awareness in the street. You are the man, but you are outnumbered by the MSM. We try to change that.

    • Greg

      Thank you Norcar foir the support.

  40. superjibby

    Remember, the nearness of the war (written about long ago) with Persia and the West is very near. I don’t believe it’s a coincidence that the soon (next phase) of the global financial system blowup has the same timing:

    1. Debka reports that Israel just tested the Jerico 111, capable of a tactical nuclear payload with a 7,000 km range (this is a game-changer) for Iran and truly the world.
    2. Nov 8th release of the IAEA’s report on Iran’s pace of nuclear development…a perfect “excuse”. (One day prior to FEMA’s shutdown test of all TV and Radio)
    3. Syria’s Assad getting the “expedited” delivery from Russia for the Super sonic antiship cruise missles.
    4. Ambassadors of the respective countries being recalled.

    War and global finance go together historically, unfortunately, as a perfect couple.

    Best Regards,

    • Greg

      Sharp on-target analysis. Thank you for posting it here!!!

  41. john b

    i think most well read and astute people in the USA and Canada have been expecting this for some time now. i have been expecting it since 2001 when gold began its uptrend move.and the tech boom encouraged me that i was on the right path. the recent mortgage meltdown even further backed up my beliefs.
    the sh*t will hit the fan soon. giving a time frame is pointless. there are too many variables trying to protect themselves and their multimillionaire and billionaire friends before it happens, but it will happen.
    we can only pray that greece says no to the referendum and flees the EU.
    do what iceland did!give people the control and NOT the big bankers!
    things that have not been mentioned when the collapse happens:
    street people on meds.people on addictions. the govt will stop funding these people. what will happen then? mentally unstable people living on the streets not being allowed to receive their needed meds will create a minefield of potantial crime unseen since the great depression.
    protect yourselves! expect the worst. i live in canada and i am in a minority in my beliefs re:canadian economy.
    when the usa economy hiccups we feel the repurussions. when usa finally collapses we up north will follow you to the bottom.
    dont forget we have a orime minister who believes the world was created only several thousand years ago. he was a bush crony. he will do anything to protect his power and staus(he is an egomaniac).he will curb our freedoms much like the americans.
    our economic geniuses did not predict the 2008 implosion.nor its affects on our economy.
    so we are in the same boat as the americans.
    our trade is 80% with the usa.
    when you fail we will fall!
    i am prepared. i have been buying non-perishable food and weapons and water. i have several guns and other devices to protect me and my family. try and steal from us and you will find a rude awakening.
    police enforcing the laws?forgot it! they will be outnumber 100000s to 1
    no sane cop will get in the way of that.
    this will not end nicely. capitalism at its very core is at stake now and the very near future.
    what the result will be is up in the air.
    but! china is promoting a gold standard now and so are some mid east countries.
    the days of us $ world supremecy is well near the end.
    and that wont be kind to us.

  42. MasterLuke

    Oh yeah, I’m just glad I can go to a news site where the top story doesn’t include the words – Justin Bieber or Kardashian – or some sort of false information pertaining to an economic recovery or other bullshit press articles. As Adults we need to face the truth that we live in a system of fraudulent rules and we are witnessing a house of cards.

  43. Martin

    No matter what the referendum vote indicates Greece will default. The question has always been about the bank haircut. Corzine invested in what they thought was a sure thing fully backed by the European Central bank. AS in 2008 the answer now is the same as the answer should have been then– let them fail. The on going effort by the CB’s to obfuscate and protect their own interests must fail, unfortunately , the people are left with the shovel and cart to clean up all the dung in the streets.
    Thank you

  44. Martin

    The referendum is scrapped! HA
    I was working in NYC in the 70’s . There was this guy who had ventured out on his own and was now booking the football card sheets. One week I saw him and asked him how he was doing with his new enterprise– he said– “I don’t do them anymore I got a phone call”. The mob does not reward the entrepreneurial spirit.
    My guess is Papa got one of those calls himself!

    • Greg

      Martin I agree. The Greece PM got major pressure to scrap that deal but it cannot be scrapped.

  45. William

    Thanks Greg for insight into real events that are game changers. Obama’s children protesting on wall street are a none event, they can hold signs, chant and rape each other as they deficate in the streets but in the end they wont change much accept there underwear once a week. But when you devote your time to the meat like this story thats when I real like you! Keep focused Greg. PS I heard a person on radio the other day state dont but gold instead buy all the things that use everyday and buy lots of it.

  46. Bruce Stebbing

    HI Greg, I always read your news because it seems like the only source of truth these days. There are other countries lining up for default such as Portugal, Italy, Greece and Spain, the PIGS, plus Ireland too. After they fall there will be othehrs too.

    Governments are still trying to crush the wall street protests everywhere in various countries, as the corruption and greed continues.
    China will not bailout the entire world ! China will be able to take over after all the bankruptcy sales. The amount of debt, piled on more debt, backed up by even more debt, is staggering. When will it end??? We will need a new word for all the fake play money that will need to be printed. What comes after a trillion?

  47. Hal (GT)

    Greg, you put very eloquently the innate reaction I had to the news of these two items. It is not good. I was just talking with my father today, and he doesn’t follow financial stuff all that much, and out of the blue he said to me he felt like the world was set to go through some major pain, particularly financially. He mentioned what’s going on in Greece.

    Add to this what Italy did with cutting 25 basis points and you just know that the dominoes are falling one by one.

  48. Sarmad

    I hope it all blows over so I can buy my wife a Jaguar XKR for her 40th…

    All I’m buying at the minute is rice + beans.

  49. V4vendeta

    Buy farming land, whatever size, grow food and raise chickens, whatever for self sustainability.

  50. Hank

    No more referendum. So now what?

  51. superjibby

    Remember…it’s still not at all…a certainty that the referendum is scrapped!

    Overseas, the reports seem to point to that (there will be no referendum if and only if there’s an agreement from the main opposition party).

    As of Thursday afternoon at about 1:00 pm Central time, the main opposition party leadership walked out of talks in an emotional huff, calling G-Pap a liar, etc. So this appears like anything, so far, but an agreement (hence: referendum potentially still on).

    The reality is also that, even if no referendum, and current leadership goes…there will likely be “huss” and “fuss” getting in the next government…USING UP CRITICAL TIME. (Dec. 15th seems to be a needed time for Greece to receive funds) THE NEXT TRAUNCE PAYMENT WON’T BE MADE UNTIL (PER SCUZZY FROM FRANCE) “THEY (GREECE) AGREE” (TO THE DEAL).

    So it seems increasingly likely…as these “games” play back and forth…a point is soon, when the formal default is “ON” FOR REAL…THEN THE RACE IN “ON” FOR REAL.


    This is major league cat and mouse…indeed like nothing I’ve ever seen – and one that’s merely a timing issue: some coordinated; some not, with the other key geopolitical, military and (big picture, spiritual) events.

  52. j colapinta

    This is news to you? Seriously? Traders as well as EVERY SINGLE TRADING FIRM knows this goes on. All firms play with clients money without the clients knowledge. Give me a break. Oh it’s against the law the SEC says. Please. Traders and firms make some serious coin by betting with client money, MF just was in wrong place at wrong time and got caught. I would say you would have to be retarded to think it is all on the up and up everywhere else except MF. Lets use “fimat” as an example, they just love when every couple of months comes something we traders like to call the “GOLDMAN ROLL”. Please by all means feel free to look into this, or answer me back. It has been happening since the beginning and will continue till it’s discovered. Hah! What a joke! The “roll” is what makes 1%ers richer and your stupid average everyday joe none the wiser.

  53. nm

    The Greece PM got major pressure to scrap that deal but it cannot be scrapped

    What do you mean it can’t be scrapped? What choice do the people have?

    • Greg

      People will have a referendum one way or another. It may come as protests in the streets which is what happened today and I expect many more protests to follow. That’s what I meant. Greece will default in the end.

  54. Mountainaires

    “You wonder why the Occupy Wall Street people are protesting greed and corruption?”

    With all due respect, Greg, OWS isn’t protesting greed and corruption so much as they are demanding their own bailout. You give them far too much credit for having a plan other than criminal mischief, mayhem and wealth redistribution. Most of OWS is clueless; the rest have an agenda, and it isn’t “protesting greed and corruption.”

    • Greg

      This is on their website “The one thing we all have in common is that We Are The 99% that will no longer tolerate the greed and corruption of the 1%.” I know these guys are asking for $1 trillion in student loans to be forgiven and I am against that. However, I am for their 1st Amendment rights. I find it puzzling how these people are vilified by the right when it is the rotten criminal bankers that should be the focus here. Do you hear anyone in the Republican party asking for investigations? Not a single big Wall Street banker has gone to jail and this is 50 times bigger than the S&L crisis!!! Please do not give me the Republican talking points. They are full of crap and are just as bad as the Democrats. There is also not a credible plan to fix the economy by the right or left because both parties are being bought off by the bankers. The Banks are insolvent and they are being propped up by phony accounting and continued bailouts–not a word about that from Rush, Hannity, Cavuto or O’Riley not a word. The Fed spent $16 trillion in the wake of the 2008 meltdown picking winners, and the field is mum–but everybody is up in arms about a $5 debit card fee. WTF???? If you do not fix the banks and knock the fraud out of the financial system, you will never fix the economy. Our wealth is in the process of being redistributed by the power elite criminal Wall Street bankers and there is not a word about that. !!! What the banks and Wall Street had done with the help of the government they paid off is criminal. If you want to get mad about something get mad about that, not a bunch of snotty kids exercising their 1st Amendment right. Thank you for weighing in. I am not trying to be harsh and I appreciate your comments and support.

  55. sean

    I think that what some of you aren’t understanding is what Greg has not said. He has warned of financial meltdown, depression and runaway inflation. Some of you have asked “should I look at safer investments?” yeah you should. like gold,silver,food,gas.. Think survival not prosperity. If Greg is right,, and I fully believe he is the life we have grown accustomed to will DRAMATICALLY change..

    • Greg

      Thank you Sean for the analysis. At the very least, life is going to cost a whole lot more.

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