We The Sheeplez- The Coming Economic Collapse.."A Nation Of Sheep Ruled By Wolves" Thomas Jefferson

Goodbye Euro, Hello Drachma

A few months ago, when Zero Hedge first broke the news that the Drachma is trading at several major banks on a "when issued" basis at the client's request, it was promptly dismissed. Alas, it may be time to dismiss the dismissal, after Spiegel reports that as one of the scenarios considered for a Greek default, Germany anticipates the reintroduction of the drachma by the pathological liars at the Greek parliament. Yes: the currency that Greece was so happy to jettison 10 years ago when after the assistance of Goldman to hide its bloated debt, to much pomp and circumstance it entered the soon to be defunct Eurozone, is coming baaaaack.

10 years later, and the best performing asset is......

silvergoldsilver at silvergoldsilver - 2 hours ago

For all those late to the game and to those that will continue to be late to the game, I present

Guest Post: In Praise of Flexibility

Let us speak in praise of flexibility, and avoid the siren songs of false precision and certitude. Let us confess that the situation globally and in Europe is unprecedented and thus intrinsically unpredictable; predictions based on the past or models plucked from the ether may prove to be not just inaccurate, but disastrously misleading to all those who put store in them. A flexible outlook avoids the temptations of zealotry, which in these times often takes the form of stating what is "impossible" (i.e. near-zero probability) and what cannot possibly happen--even if it has already happened. The only realistic prediction that can be made about the next few months is that events will be unpredictable. What we see, think and believe as near-certainties now may be undermined by events and new data. The greatest assets going forward may well prove to be flexibility, adaptability, humility and openness to low probability events suddenly transpiring despite previous estimates of their relative impossibility.

Jim O'Neill Bets The (Horse) Farm On Chinese Decoupling All Over Again

Like a Swiss watch, Goldman's Jim O'Neill, who refuses to acknowledge that decoupling between the US and the BRICs not only never existed, but was always a flawed premise to begin with, has released his latest dose of Kool-Aid, in which he bets the horse track on, you guessed it, Chinese decoupling.... Sigh. Then again what can one expect: just like Bernanke will keep trying QE until QE succeeds (it won't) or the market breaks; and just like the Krugmanites will keep pushing for an ever bigger fiscal stimulus (because the last one is never big enough, regardless of how big it is), why should one expect the latest addition to Goldman's biggest loss leader (GSAM) be any different. And what makes this particular episode not only tragic but very much comic, is that the former "Red Knight" now sees the Chinese launch of a fully convertible and floating Yuan by 2015 as the panacea to the US stock market, and Goldman bonus doldrums (because when one cuts to the chase, that's really what it's all about). Little does it bother the BRICer that the advent of a new reserve currency would have a devastating impact not only on existing risk markets, but on so-called risk free ones as well. Remember that 0.000% yield on last week's 4 week bond auction? Yeah... that would not come back. Ever. Anyway, with the upcoming week sure to provide significant tears, especially to European readers, here is at least some comic relief (yes, O'Neill does in fact "applauds" the move by the pegging move by the SNB - apparently loading up the asset side of your balance sheet with toxic paper which may or may not exist post the Greek expulsion is considered prudent when one is a Goldman partner) to start it off with.

Things That Make You Go Hmmm - Such As The Keystone Cops At The Helm Of The Eurozone

Guest Post: Gold Technical Outlook: Looks Set For Upside Break

Looking at the weekly chart on Gold (vs. USD), the sell-off from two weeks ago at the rejection of $1900 was impressive not so much in how much it dropped in a single week, but on how well it recovered. The following act in the next week was a solid weekly gain of 3.4% from an opening price of $1822 - 1864 closing towards the highs suggesting buyers were holding into the weekend and thus not taking profits. The following week was a sell-off but very mild in nature and a third week of price rejecting off the weekly lows. Three weeks of selling and three weeks of strong rejections off the lows clearly communicating to us anytime the shiny metal is sold off, buyers are eager to come back in. And each time, they are doing so with more confidence because every time, they are buying at a higher price suggesting they are happy to take any dips as an opportunity to buy (or invest/hold) more gold.

Merkel Allies Break Taboo With Escalating Greek Default Talk

Some in German Chancellor Angela Merkel's center-right coalition are talking openly about a Greek default, reflecting growing concern about the debt crisis and pressuring Greece.

Guest Post: The Maginot Line, Part Deux

The Maginot Line failed because it was inflexible and was largely designed to fight the last war. As Europe braces for a potential default from Greece it has to be strong, yet flexible enough to adapt to this particular situation. We learned a lot from Bear and Lehman about what can be done to contain financial panic, but not all the tools will be equally applicable here. Ironically, for all the talk about how bad it was to let Lehman fail, the U.S. banks seem in far better shape than European banks. Maybe as Europe prepares to ring fence its banks, it should remember that letting Lehman fail may be the reason US banks are in better shape now than in 2008. Citi and BAC, which required the most government support – and got it – are our weakest. Europe can use this time to reshape their banking industry and if they are willing to deal with enough short term pain, the ultimate outcome will be a banking system that can prosper and provide true long term growth opportunities for the Euro Zone – whatever that may ultimately look like.

E-Minis Open For Trading...

...Down 15. It will be a very long night. We expect an emergency announcement from the G-7 before Asia opens.

Knowledge is your best weapon...

Dear Casey Subscriber,

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Why we’ve entered the Greater Depression, and what we can expect for the near future
Why the housing market is not going back up anytime soon
Why owning gold and silver is a must to weather the economic storm
Why things will get much, much worse before they get better – and why you need to protect yourself now

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To good investing,
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